The exam will have 5, 10-point questions on it from the questions below.
List 2 data sources researchers use to estimate historical standards of living and explain what they can infer from these sources. List three indicators of economic development other than National Income measures (NI, GDP, or GNP, level, growth rate, or per capita) that are of interest to economists and explain what can be inferred from each of these indicators.
i. Life expectancy at birth. Unambiguous measure of welfare
ii. 4. heights and skeletal remains (Professor Steckel’s research) iii. Individual height is determined by “genetic potential” basically how tall were your mom and dad. In large numbers, we know that heights of humans does not vary by race or ethnicity. In large numbers differences are due to environmental factors like diet, nutritious, stress and work effort during growing years, diseases
Explain in detail 3 weaknesses of per capita GNP (or GDP) as a measure of economic well-being. Although this measure has the flaws you just listed (and others) it is the most oft-referenced statistic when considering standard of living differences across countries. Why?
i. 1. Does not capture all economically important activities 1. Black market / informal market – much larger in less developed countries 2. Agriculture production for own consumption
3. House work
ii. 2. Dollar value of a good does not always equal “social” value (e.g., no accounting for pollution costs) 1. Problem of externalities. Debate over the standards of living during the industrial revolution. Wages rose, prices dropped, but other aspects of life deteriorated iii. 4. Does not account for differences in “cost of living” across time and space 1. Even if GDP per capita were a good measure of average income, comparisons across space and time would be hindered by the fact that the “cost of living” – that is, the cost of a certain bundle of goods or a certain lifestyle – is not the same in different societies (prices – housing prices in particular, taxes, etc.)
What has happened to global economic inequality since 1960? Why? Characterize the progress in social measures (education and health) in impoverished nations. Why is there less of a link between improvement in these measures and GDP than in the past?
Describe the North and Thomas model explaining the Neolithic Revolution. Specifically, use a graph to illustrate how population growth affected this change. How is this model consistent with what we know about the transformation from Hunter-Gatherers to Settled Agriculturists?
1. The value marginal production that man gets from hunting is high and constant until a certain level of increase population (qd), when the return begins to diminish. 2. The value marginal production that man gets from agriculture is constant with increase population, yet lower than hunting up until a certain point, qc. 3. This decrease in returns to scale of hunting is due to decreases in productivity. 4. Hunting will continue until it reaches the population level of qc, which is the intersection of the value marginal production of hunting and agriculture. 5. After this intersection, resources will be allocated to agriculture, as the line is constant with population growth, and more value adding than hunting. 6. In sum, there are three changes that could account for the transition from hunting to ag. Individually or acting in concert, a decline in the productivity of labor in hunting, a rise in the productivity in agriculture or a sustained expansion of the size of the labor-force, could have resulted in the transition of man from being exclusively a hunter to increasingly a farmer.
List 4 contributions of the earliest civilizations (those that eventually formed the Babylonian Empire) and explain how each was important to continued economic growth.
i. Bureaucratic necessity: state needed to keep records of tax collections and tributes ii....
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