Sections A accounts for 30% of the marks Section B accounts for 70% of the marks Answers for both sections should be written in the same answer book

Transcription

1 UNIVERSITY OF EAST ANGLIA School for International Development Main Series UG Examination INTRODUCTION TO ECONOMICS OF DEVELOPMENT DEV-4003B Time allowed: 2 hours Answer ALL Questions Sections A accounts for 30% of the marks Section B accounts for 70% of the marks Answers for both sections should be written in the same answer book Notes or calculators are not permitted in this examination Do not turn the page over until you are told to do so by the Invigilator DEV-4003B Module Contact: Dr Paul Clist, DEV Copyright of the University of East Anglia Version 1

2 Page 2 SECTION A (30%) There are 15 multiple-choice questions in this section. All questions are compulsory. All questions receive equal weight. Write all answers in your answer book in the form e.g. 16 e, 17 f etc. 1. A situation of monopoly arises when: a. There is one buyer and many sellers b. Buyers and sellers are in equal number c. Prices become too low for producers to make profits d. None of the above 2. When the Lorenz curve is very close to the line of equality: a. The Gini coefficient gets closer to one b. The Gini coefficient gets closer to zero c. The headcount ratio gets closer to the population size d. The headcount ratio gets closer to zero 3. In the Solow Model: a. There is a steady state b. Technology is exogenous c. None of the above d. Both the above 4. The Growth Report departs from the so-called Washington Consensus in that it: a. Puts more emphasis on liberalisation and privatisation b. Advocates a more substantial role for the state alongside markets c. Gives more importance to economic growth and international trade d. Penalises more heavily highly indebted countries 5. The production function behind endogenous growth models is typically: a. Linear b. Concave (i.e. less than linear) c. Convex (i.e. more than linear) d. None of the above 6. The social return to educating women may exceed that of educating men for all of the following reasons EXCEPT: a. educating women reduces child mortality b. educating women reduces fertility c. educating women reduces the spread of HIV/AIDS d. educating women leads them to earn a higher income than men

3 Page 3 7. Rice yields per acre are far higher in Japan than in the United States. This difference reflects the fact that Japanese rice farmers a. are far more efficient b. are more mechanized c. face a higher price of land relative to capital and labour d. have access to better technology 8. The Harris-Todaro model explains how a. Urban unemployment or underemployment in developing countries can be caused by migration from rural to urban areas driven by the difference in expected income b. People migrate from rural to urban areas to look for a job c. Cities grow because they attract people from rural areas d. Most people who move from rural to urban areas already know where they will work 9. HIV/AIDS is different from most other diseases that occur frequently in low income countries because a. it attacks primarily young adults, an economically active segment of the population b. its therapy need not rely on political and economic initiatives c. the international community was slow to respond to the growing crisis d. it is a chronic disease 10. Which of the following is not likely to reduce population growth a. Better health care b. Higher economic development c. More employment opportunities for women d. None of the above 11. Most aid has been given: a. bilaterally. b. multilaterally. c. through private organizations. d. through individuals. 12. The Dutch disease refers to: a. focusing on import substitution b. difficult demographic trends, as a country grows c. currency fluctuations d. the negative effect of booming tradeable on other sectors TURN OVER

4 Page Which of the following should be classified as a nontradable good or service? a. rural road construction services b. wheat production wholly consumed within the country c. computer equipment that cannot be produced locally d. all of the above 14. Economists generally prefer the use of subsidies instead of protective tariffs because: a. subsidies create smaller deadweight losses b. subsidies can be targeted more carefully c. the visible cost of subsidies creates an automatic incentive to phase out protection d. all of the above 15. In international economics, being a small country means: a. it is land-locked b. it doesn t influence a given good s price c. its population isn t sufficient to grow quickly d. it is politically powerful

5 Page 5 SECTION B (70%) There are 10 questions in this section. All questions are compulsory. All questions receive equal weight. Keep your answers brief and to the point: average answer length is expected to each be about a quarter of a page and should not exceed half a page. 16. What is the difference between FGT poverty indices for alpha=0, alpha=1 and alpha=2? (Foster, Greer and Thorbecke, 1984) 17. Outline some of the policies which a government can implement to avoid the so called tragedy of the commons. 18. Explain the differences between the view of neoclassical economists and that of John Maynard Keynes on the role of the state in the economy. 19. Outline the phenomenon called resource curse and provide possible reasons why it occurs. 20. What do we mean by social preferences? How can they help understand some economic relationships? Discuss using an example. 21. How can returns to education help explain demand for education? 22. Migration from rural to urban areas in developing countries is often explained using the Harris-Todaro model. Please summarize in one sentence the core of this model. 23. Explain the theory of comparative advantage. 24. Discuss whether, theoretically, a growth strategy based on primary exports is a good idea. 25. Do the different types of aid conditionality work? END OF PAPER

6 Multiple choice section: Here we re looking to test student s breadth of knowledge, with some relatively easy questions on big topics, and other more obscure questions testing if students have really absorbed deeper facts and insights. The average for this section was 9.6 out of the 15 questions correct, with a high of 14 and a low of 5. Short essay section: Questions B1 and B5 were the most disappointing, with many students not really able to give a clear answer. In the case of B1, on FGT poverty indices, there are several ideas to get across. However, if students have really understood the lecture, they would be able to reproduce the arguments quite quickly. In the case of B5, there was just clearly a misunderstanding by a large minority of students about what social preferences are. This may indicate a lack of attention paid to the lecture and lecture notes, and an overreliance on the course book. A weakness which is incredibly easy to fix is that a surprisingly high number of students didn t answer some questions. In total, 27 questions were skipped. This underlines the importance of a) revising the whole course and b) using the time well. There were a number of excellent answers, which provided the key arguments as well as some nuance as to whether the arguments were valid. For example, for question B8 a solid answer mentions absolute advantage before explaining comparative advantage. Excellent answers then went on to explain whether the theory really holds up (e.g. it is static) and its implications (there are diffuse winners and specific losers from trade). This doesn t need to be long/detailed, but showed a deeper understanding not only of the theory itself, but how it relates to reality and other theories. Finally, we re aware that this course caters to students with a range of background in economics. We ve enjoyed teaching you some of the key ways of thinking using economic logic and tools, and hope these deepen your thinking about important issues.