MGEC81H3 Lecture Notes - Lecture 9: Externality, Total Fertility Rate, Poverty Trap

92 views4 pages

taupeduck639

19 Apr 2018

School

UTSC

Department

Economics for Management Studies

Course

MGEC81H3

Professor

Garth Frazer

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Mgec81 (g. frazer) some potential questions after lecture 9. Africa: a number of tables and figures were presented in this lecture. Total fertility rate is dropping in each of the regions of the world (africa"s fertility rate is still high: in the harrod-domar model with population growth we saw an instance of a poverty trap. This type of a poverty trap has sometimes been referred to as a malthusian poverty trap. Technological progress and social progress (such as change in culture and economic institutions) Refer to figure 6. 8, technological progress can shift the income growth rate curve above population growth rate ant any level; social progress such as change in culture and economic institutions can shift the population growth rate down. How are these factors different from those in industrialized countries: children are a substitute for social security in old age.

Related Questions

1. What does the term s*Y represent in the capital-accumulation equation of Solow growth model?

a) The labor-income share of GDP.

b) Net investment.

c) Gross investment.

d) The net change in the capital stock from one year to the other.

2. In the Solow growth model, suppose that the savings rate is 25%, the depreciation rate is 10%, the current capital stock is 10 trillion $ and current output of a country is 4 trillion $. What will the capital stock of this country be in the following period?

a) 10 trillion $.

b) 11 trillion $.

c) We cannot tell since we are not given information about technological progress.

d) We cannot tell since population growth is not known.

3. Consider a country which starts with a capital stock below its steady-state level in the Solow model (without technological change). Why is growth slowing down over time for this country?

a) Population growth is becoming stronger over time since the population is growing, which makes it harder to accumulate high levels of capital per capita.

b) A country cannot maintain the same savings rate forever, so investment must decrease at some point.

c) The more capital there is, the more of it depreciates. As the country becomes richer, it becomes ever harder to replace depreciated capital.

d) There are diminishing returns to the factor capital. Thus investment, capital and GDP per capita grow by ever smaller amounts as the country becomes richer.

4. Suppose Pakistan has a higher savings rate than Iran. Both start out with the same capital per worker. All other parameters are the same for both countries (population growth and depreciation rate). The Solow growth model (without technological change) predicts that...

blackweasel275

2. Which one of the following statements does not indicate an important difference between traditional economics and ecological economics?

Ecological economics places greater emphasis on the importance of energy resources

Ecological economics places greater emphasis on the carrying capacity of the environment

Ecological economics places greater emphasis on the scale of economic activity

Ecological economics places greater emphasis on the importance of natural laws

Ecological economics places greater emphasis on the flow of goods between households and firms

3. The ability of the environment to absorb and render harmless the by-products of human activity is called ...

Carrying capacity

The sink function

Depletion

Throughput

The source function

4. Which of the following is an example of the source function of the environment?

Trees absorb some of the carbon dioxide emitted by human activity

Wetlands reduce the pollution levels in water

Winds carry air pollution away from a city

Humans harvest fish from the oceans

Bacteria break down discarded wastes

5. Which one of the following relationships is not included in the standard circular flow model?

The flow of goods and services from firms to households

The flow of labor from households to firms

The flow of pollution from firms to households

The flow of money from households to firms

The flow of wages from firms to households

6. What statement below best describes how the environment is incorporated into the standard circular flow model?

The long-term availability of natural resources is considered

The pollution generated by firms and households is considered

The input of solar energy is considered

Natural resources are considered as inputs into the production process

The build-up of waste heat is considered

7. What is the primary external input into the broader ecological circular flow model?

Pollution

Solar energy

Fossil fuels

Geophysical cycles

Factors of production

8. What is the only net output of the broader ecological circular flow model?

Goods and services

Solar energy

Factors of production

Geophysical cycles

Waste heat

9. What is the standard economic technique used to compare present and future benefits and

costs?

Property rights

Microeconomics

Externalities

Macroeconomics

Discounting

10. Human activity is producing changes in which cycle that may lead to significant changes in the global climate?

Carbon cycle

Nitrogen cycle

Water cycle

Phosphorus cycle

Organic cycle

11. The Malthusian hypothesis ...

Has proven to be remarkably accurate

Is irrelevant for studying modern environmental problems

Has continuing implications for the debate on current environmental issues

Applies only to developing countries

Applies only to developed countries

12. What is the key to escaping the Malthusian trap?

Increasing productivity per capita

Increasing population

Increasing natural capital

Increasing population density

Definition of property rights

13. Real GNP per capita is defined as ...

GNP divided by population

GNP adjusted for inflation

GNP adjusted for capital depletion divided by population

GNP adjusted for inflation divided by population

GNP adjusted for depreciation divided by population

14. What two factors do standard economics consider as the most important in explaining productivity increases?

Increasing energy supplies and technological progress

Increasing capital stock and technological progress

Increasing energy supplies and increasing natural resources

Increasing capital stock and increasing energy supplies

Increasing capital stock and increasing natural resources

15. Which one of the following statements about sustainable development is false?

Sustainable development requires all energy to be derived from solar energy

Sustainable development considers the scale of the macro-economy

Sustainable development requires a population level below carrying capacity

Sustainable development combines modern and traditional agricultural techniques

Sustainable development requires some type of population policy

16. Which one of the following statements about sustainable development is false?

Some people have complained that sustainable development is a term devoid of specific content

Some people consider sustainable development just a slightly modified form of traditional economic growth

Sustainable development should provide for human needs without undermining the global ecosystem

Sustainable development would redefine economic goals

Sustainable development will require increased resource consumption

17. Which one of the following is an example of demand-side management?

Building a new nuclear power plant

Increasing oil exploration in the Arctic

Building a new solar energy plant

Replacing incandescent with compact fluorescent light bulbs

Increasing reliance on domestic oil sources rather than imports

18. The standard economic approach to pollution control

aquamarinegoose75