Podcast Beta
Questions and Answers
The structural transformation of the economy involves a shift from modern urban industry to traditional rural agriculture.
False
The Lewis turning point is reached when the labor-to-land ratio is increasing.
False
The Lewis two-sector development model perfectly reflects the institutional and economic realities of most contemporary developing countries.
False
The modern-sector labor market is assumed to be non-competitive in the Lewis model.
Signup and view all the answers
The Lewis model assumes that there is surplus labor in urban areas and full employment in rural areas.
Signup and view all the answers
Structural-change models only focus on the mechanism of underdeveloped economies transforming their domestic economic structures from a heavy emphasis on modern manufacturing to a more traditional subsistence agriculture.
Signup and view all the answers
The Lewis Theory of Economic Development suggests that industrialization occurs through the transfer of surplus labor from the modern industrial sector to the traditional agricultural sector.
Signup and view all the answers
The labor supply curve becomes negatively sloped as modern-sector wages and employment continue to grow.
Signup and view all the answers
Structural-change models employ the tools of neoclassical price and resource allocation theory to describe how the transformation process takes place.
Signup and view all the answers
The demand for manufactured goods is more concentrated in rural areas due to the need for processing and transportation.
Signup and view all the answers
W.Arthur Lewis' theory of development focuses on the transformation of a primarily industrial economy to a subsistence economy.
Signup and view all the answers
A big push to urbanization is not necessary to achieve industrialization.
Signup and view all the answers
Hollis B.Chenery's patterns of development analysis focuses on the role of agricultural transformation in economic development.
Signup and view all the answers
The two-sector surplus labor model is a theoretical model of development that focuses on the transformation of a primarily industrial economy.
Signup and view all the answers
Infrastructure, such as roads and railroads, is tradable and can be located anywhere.
Signup and view all the answers
Investing firms do not contribute to lowering the costs of other firms by using infrastructure.
Signup and view all the answers
There is overinvestment in training facilities due to the fact that entrepreneurs know that workers will not be enticed away by rival firms.
Signup and view all the answers
Workers have a high demand for training because they know exactly what skills to acquire.
Signup and view all the answers
