Section 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
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1 UNIVERSITY OF EAST ANGLIA School of International Development Main Series UG Examination INTRODUCTION TO ECONOMICS OF DEVELOPMENT DEV-4003B Time allowed: 2 hours Answer ALL Questions Section 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 over the page 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, which are all compulsory. Each question has one correct answer and is worth 2%. Write all answers in your answer book in the form number: letter eg 1A 1. When an economy increases the amount of capital per worker, this is called: a) Capital widening b) Capital deepening c) Labour widening d) Labour deepening 2. When the Lorenz curve is very far away from 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. Choose which of the following statements about the Solow Model is correct: a) Technology is endogenous b) It is based on constant returns to capital c) There is no steady state d) None of the above 4. Monopoly and monopsony are examples of: a) Market successes, in particular the rationalisation of production b) Market successes, in particular the boosting of demand c) Market failures, in particular imperfect competition d) Market failures, in particular external diseconomies 5. The production function behind the Harrod-Domar growth model is: a) Linear b) Concave c) Convex d) None of the above
3 Page 3 6. As the twenty-first century moves forward, many nations in which area of the world will continue to face high fertility and the burdens (and opportunities) of a young population? a) Latin America b) Southeast Asia c) Sub-Saharan Africa d) Central Europe 7. Which education indicator refers to enrollments of those in the relevant age group? a) Gross enrollment rates b) Net enrollment rates c) Grade survival rates d) Learning outcomes 8. As societies age and health improves, the pattern of disease and causes of death also shift in a generally predictable pattern; this shift in disease pattern is known as the: a) Epidemiologic transition b) Survival deficit c) Diminishing returns to health d) Hippocratic paradox 9. With a few exceptions, famine no longer seems to be a threat in Asia; however, this country marks a clear exception to that premise: a) China b) Vietnam c) North Korea d) Laos 10. Which of the following is not a common characteristic of the traditional 'Homo Economicus': a) Perfect time discounting b) Self-interested behaviour c) Maximizing behaviour d) A tendency to reciprocate TURN OVER
4 Page A theoretical benefit of a primary export-led development strategy includes: a) Linkage effects b) Diversification c) Becoming a price-maker d) All of the above 12. Gains from trade are made up of the gains from plus the gains from. a) Population size; diversification b) Exchange; diversification c) Technology; education d) Exchange; specialization 13. The Washington Consensus includes encouraging countries towards: a) Trade liberalisation and privatisation b) Better market regulation c) Greater provision of public goods d) Subsidies of important industries 14. Which of the following should be classified as a nontradable? 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 15. The Prebisch-Singer hypothesis states that the terms of trade will get better: a) For commodity goods b) For manufactured goods c) For all developed countries d) For all developing countries
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: answers are expected to each be about a quarter of a page and should not exceed half a page. 16. Explain and provide examples of how different indices used to measure poverty can lead to differences in the allocation of resources for poverty alleviation. 17. Outline the main differences between orthodox and Keynesian economic thought with respect to free markets and the role of the state in the economy. 18. Outline some of the policies which a government can implement to avoid the so called tragedy of the commons. 19. Explain, using graphs, what is meant by decreasing returns to scale and increasing returns to scale. 20. Explain what is meant by returns to education using a graph. What is the difference between private and social returns? 21. How does the concept of demographic transition help to understand the situation in developing countries? Explain using the concepts death rate and birth rate. 22. In what ways is the classic micro economic model of economic behaviour enriched by behavioural economics? Discuss using two examples. 23. Define the theories of absolute and comparative advantage, and explain their key difference. 24. Why does the Dutch Disease theory mean not all sectors will benefit from a developing country discovering oil? 25. Explain the two types of selectivity that aid donors have used. END OF PAPER
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