GoConqr hat ein neues Design! Sag uns, wie es dir gefällt.

Kostenlos registrieren

Karteikarten

Ohne Titel

Sebastián Tagle Spanisch 66 Karten

Karten in diesem Stapel (66)

  1. 1Preguntarespuesta
  2. 2Since 2005, food prices in Indonesia have been: a) increasing correcto b) decreasing c) unchanging and low d) unchanging and higha- While food prices can be quite volatile, there has been a general upward trend in Indonesia and the rest of the world since 2005.
  3. 3How does Pak Solhin rationalize the fact that his employer, a local farmer, cut his job rather than his wages? a) Pak Solhin was growing so old that the employer decided he should retire. b) If his employer cut his wages below a certain level, Pak Solhin would not be able to afford enough food to give him the strength to work. c) His employer imagined it would be easier to manage fewer people on the farm than more people. d) A strong farmhand union has made wage decreases illegal in Indonesia since the 1970s.B - Pak Solhin describes what we will later discuss more formally: a nutrition-based poverty trap. Pak Solhin believes that the local farmer who employs him would rather fire him than cut his wages. This is because, at very low wages, Pak Solhin would be incapable of buying enough food to continue his (largely manual) labor for the farmer.
  4. 4Where do poverty traps stem from? Select all that apply. a) Biological mechanisms b) Intergenerational poverty c) Natural talent and abilityA + B. Both biological mechanisms and intergenerational poverty can result in the scenario in where your circumstances today affect your circumstances tomorrow in a way that leads to a poverty trap. Biological mechanisms, such as reduced health that results from low food consumption due to low income - may reduce your ability to work and produce any further income. Intergenerational poverty results in lower access to income-generating opportunities such as a good education and thus well-paying jobs, which again results in the scenario where your circumstances today affect your circumstances tomorrow, leading to a poverty trap. Many other scenarios can be included in this framework. For example, poverty traps could also stem from bad public transportation, which could prevent a person from getting to school or to an interview and thus creates a barrier to obtaining work to provide for his or herself in the future. Again, in this example, your circumstance today (poverty) affects your circumstances tomorrow (ability to get a job and earn an income).
  5. 5Which of the following variables can be represented on a capacity curves y-axis? Check all that apply. a) Future Income b) Work Capacity c) Todays IncomeA+B. A capacity curve represents a relationship between todays income (the x-axis) and things like income tomorrow, the ability to work, or calories consumed on the y-axis. Therefore, Future Income and Work Capacity can be represented on the y-axis, whereas Todays Income is typically represented on the x-axis. Capacity curves are one way we can visualize a poverty trap.
  6. 6Is it true that S-shaped curves always describe the relationship between income today and income tomorrow in developing countries? a) Yes, it's always true. b) No, it's only true in the poorest countries. c) No, it depends on the returns to X today at various points on the X-axis. d) No, it's never true.C. While it is true that for a poverty trap to exist, the S-shape of the curve also needs to exist, it is not necessarily true that the S-shape curve always describes the relationship between income today and income tomorrow (or income today and work capacity, or calories consumed and income tomorrow or any other x and y pairings which could describe a poverty trap). For the S-shape of the curve to occur, we must see initial low returns to X today, then a region of steep return followed by another flatter period.
  7. 7If the returns to education were high for low levels of schooling, but were low for all higher levels, what shape would we see on our graph between education today and income tomorrow? a) An S-shaped curve. b) A straight line. c) A flat line. d) An inverted L-shape. correctoD - If the returns to education are high only at low levels, this might mean that all that matters for future income is knowing how to read, which you learn in Kindergarten through 4th grade. This might be true if the most valued skill in the job market is ability to read, or alternatively, it might be the case that once you learn to read you can teach yourself everything else. This represents a familiar concept in economics, known as diminishing marginal returns. At low values of X (education today), we have big shifts in Y (income tomorrow) and at moderate and high values of X we have small shifts in Y. So we have a very steep slope followed by a flat line. This produces an inverted L-shaped curve.
  8. 8Why might savings have lower returns for the poor than for the rich? Check all that apply a) The poor can't afford to save. b) The poor cannot obtain access to bank accounts, because the bank asks for a high fee in order to maintain them. c) The rich are more likely to be able to save enough in order to pay the fixed cost of their own businessA - Answer choice A, which states that the poor cannot afford to save, is incorrect. All other answer choices are correct. Answer choice A is incorrect since the poor might be able to save, but they just might not be able to save as much as the rich.
    Even if the poor and rich can save the same proportion of their income, the rich are more likely to be able to put their money to better use. For example, the rich have better access to saving storage options, such as bank accounts, as they can afford to pay the bank fee. The rich also are more likely to be able to save enough so that they can start a lucrative business, whereas the poor will have to save for a longer period of time in order to start a business. Additionally, even if they save enough capital to start a business, they might not have enough capital to maintain it. In summary, the rich have access to better saving mechanisms and since they can save more, they have access to better investment opportunities.
  9. 9Apart from the nutrition-based poverty trap, what are other types of poverty traps that we may observe? Check all that apply. a) Market access b) Savings c) HealthA + B + C - All of the above examples can fit the context of a poverty trap where income today affects income tomorrow.
  10. 10True or False: A poverty trap can exist in the case where the capacity curve is completely concave, starting at the origin (upside-down L) a) True b) FalseB - In this scenario you only have a high steady state where the inverted L-shaped capacity curve intersects the 45-degree line. This does not meet the conditions for a poverty trap. The criteria for a poverty trap are: (1) you have an S-shaped curve which intersects the 45-degree line at least three times creating at least two stable and at least one unstable steady states and (2) your curve intersects the 45-degree line at least once from below. An upside-down L does not intersect the 45-degree line from below and therefore at any initial condition you will reach the same high-income equilibrium.
  11. 11In what scenario can you have a situation where there is no poverty trap? Check all that apply. a) If you have an inverted L-shaped curve which describes the relationship between your income today and income tomorrow. b) When the S-shaped curve intersects the 45-degree line three times, once from below. c) If you have an S-shaped curve which never intersects the 45-degree line from below.A + C - You will have a poverty trap when dynamic forces push an individual to a low steady state below some threshold and to a high steady state above that same threshold. This can happen when you meet the following criteria: (1) you have an S-shaped curve which intersects the 45-degree line at least three times creating at least two stable and at least one unstable steady states and (2) your curve intersects the 45-degree line at least once from below.
  12. 12Which of the following is true? a) If a capacity curve is S-shaped, then it automatically implies that a poverty trap exists. b) If a capacity curve intersects the 45-degree line at least once, then it automatically implies that a poverty trap exists. c) If a capacity curve is S-shaped, intersects the 45-degree line at least once from below, and intersects the 45-degree line three times total, this implies that a poverty trap exists.C - The criteria for a poverty trap are: (1) you have an S-shaped curve which intersects the 45-degree line at least three times creating at least two stable and at least one unstable steady states and (2) your curve intersects the 45-degree line at least once from below. Therefore, C is correct. A is incorrect, since a curve may be S-shaped, but it may never intersect the 45 degree line, and therefore would not constitute a poverty trap. To prove answer B is incorrect, we can think of the case of the inverted L-shaped curve that starts at the origin, you will only intersect the 45-degree line at a high steady state and therefore will not have a poverty trap.
  13. 13What do we mean when we say herd immunity? a) People are particularly immune to malaria when they live in groups or herds. b) Above some threshold of immunity, (for example, because enough people are vaccinated) a disease stops spreading. c) The s-shaped curve can describe the return to bed net immunity.b - Herd immunity refers to the effect of positive externalities on immunizing populations from disease, thereby making it necessary to only immunize a critical percentage of a population. Answer C might be a true fact, but does not answer the question directly.
  14. 14Why might we want to subsidize bed nets? Check all that apply. a) To align public and private incentives. b) To take advantage of the learning effect, whereby subsidies push individuals over the threshold of trying a new product and once they try it they see how good it is and use it thereafter. c) To get a critical mass to take up the bed nets and then for it to spread to peers and neighbors.a + b + c - In the case of externalities, subsidies align public and private incentives. Since about 50% bed net take-up would result in much more than 50% of the population being protected, private and public incentives are not aligned here and there is potential to receive large returns for subsidizing bed nets in order for the population to reach the critical immunization point. The learning effect and peer effect are further rationales for subsiding marginal take-up of bed nets.
  15. 15Malaria is caused by: a) A virus b) A bacterium c) A parasitec - Malaria is spread through a parasite that is transmitted by mosquitos.
  16. 16Why might you not want to subsidize bed nets? Select all that apply. a) Psychological sunk cost - you have to pay for something to appreciate its value. b) Selection effect - by offering a product for free/cheap you might attract people who would not use it for its legitimate use c) Entitlement effect - when you receive something for free you expect it for free in the future.a + b + c - The sunk cost, selection effect and entitlement effects are all reasons you might not want to subsidize bed nets. In particular, the entitlement effect might counteract the learning effect in favor of subsidizing bed nets. If you expect it for free in the future, than a one time investment will not have long-run effects on purchasing behavior as the learning effect assumes.
  17. 17True or False: The World Health Organization (WHO) recommends that people should pay for bed nets instead of receiving them for free. True Falseb - The debate for whether bed nets should be distributed for free or at a subsidized, non-zero price has largely begun to favor free distribution. This is due to the clear positive externalities of bed net use and to the evidence that people are no less likely to use a bed net if it is given to them for free.
  18. 18What are some key questions we need to answer for deciding whether bed nets should be given away for free? (Check all that apply.) a) If people must pay for bed nets, will they buy them? b) Do people who receive bed nets use them for their intended purpose? c) Are people who receive bed nets for free less likely to use them? d) If someone receives a bed net for free, will he or she be more or less likely to buy another one in the future?a + b + c + d - Some of the big questions which economic research attempts to answer focus on whether people are likely to buy and use something that is good for them in this case, insecticide-treated bed nets. If people, for example, do not value goods given to them for free, this would have very important ramifications for bed net use and, more generally, public health.
  19. 19True or False: To determine the effect of price on the uptake of bed nets, we can directly compare bed net purchase rates in communities that are observed to have free bed nets with the purchase rates for communities that are observed to have more costly bed nets. a) True b) Falseb - The correct answer is false. Communities that have free bed nets are likely inherently different than the communities that have bed nets for purchase, and therefore this biases the estimated effect of free versus costly bed nets. For example, it is likely that communities with free bed nets had a high incidence of malaria and therefore needed some sort of free intervention to begin with. Therefore these areas are high-malaria regions, whereas the comparison area is a low-malaria region. Had you provided costly bed nets to the high malaria region, you might have seen higher purchase rates, since malaria is a more pressing issue there. Therefore the observed estimates overstate the true effect. You could construct arguments where the bias would go the other way.
  20. 20The situation that people would have experienced if everything had been the same except for the bed net price they faced (as compared to the bed net price we observed) is called: a) The counterfactual b) The treatment groupa - The counterfactual is defined as a state of the world in which some factor, X, had not occurred. This can, by definition, never be observed. Instead, we can attempt to mimic the counterfactual by selecting a comparison or control group that does not experience X but is otherwise comparable to those who experienced it.
  21. 21True or False: Randomly selecting the prices that different people face can remove selection bias. a) True b) Falsea - If we randomize prices across people, people cannot choose whether they will be offered the bed nets for free or at a small, subsidized price and we also make sure that the price has nothing to do with their underlying characteristics. For example, if we made free bed nets available in a clinic that is not frequently used, and let people choose to take them, we may see that the most in-the-know or the most frugal people get the free bed nets. If we compared people with the free bed nets to those without, we would be comparing apples to oranges; the two groups would be systematically different. This is called selection bias when people select into a group, and thus change its characteristics. However, by randomizing the prices people see we can avoid such selection bias.
  22. 22True or False: If everybody faced the same price for bed nets, but you randomly select whom to interview to find out if they have one, you have conducted a randomized control trial. a) True b) Falseb - If you did this, you would have selected a random sample which is integral to ensuring that your survey sample is representative of the entire target population. Randomized controlled trials, however, do not only use random samples (though they generally do, as most data-driven research does), they also randomize access to a program within that sample. In this case, a randomized control trial would randomize the prices to which consumers are exposed in order to see how their behavior changes in response to these different prices.
  23. 23What important findings arose from Cohen and Dupas bed net experiments? Select all that apply a) The cheaper the bed nets, the more they were purchased. b) The cheaper the bed nets, the higher the usage of the bed nets. c) Once you had a bed net, you were more likely to buy one in the future.a + c - The results of the Cohen and Dupas bed nets experiment showed that reducing the price of bed nets, led to an increase in uptake. In addition, we saw that having cheaper bed nets didn't attract people who misused them and didn't alter the usage whatsoever relative to costly bed nets. Bed nets were used around 60% of the time, both when they were free and when they were costly. Thus we see no relationship between bed net cost and usage. Finally, once you had a bed net, you were much more likely to buy one in the future. These outcomes all lead us to believe that the best policy for bed nets would be free distribution. You can read more about Cohen and Dupas findings here.
  24. 24What was one of the main criticisms of Cohen and Dupass first experiment? a) The study lacks internal validity: randomization is a poor way of eliminating unobserved biases. b) The study lacks external validity: its conclusions are valid only for Kenya and for pregnant women.b - Internal validity is defined as whether a study has the statistical significance, credible identification strategy, and statistical power to say, with reasonable confidence, that a program had an impact. Dupas experiment used a randomized design, which has strong internal validity. External validity, on the other hand, addresses the issue of whether that result can then be generalized beyond the group examined in that particular experiment. A study among pregnant women in Kenya may not generalize beyond this context. However, studies conducted after Cohen and Dupass first experiment have shown that the results did hold beyond pregnant women and beyond Kenya.
  25. 25How do you compute the Body Mass Index (BMI)? a) Weight (in kg) b) Height (in meters) c) Weight (in kg) divided by height squared (in square meters) d) Weight (in kg) divided by height (in meters)c - BMI is a metric often used to discuss and approximate health outcomes since it captures information about your body weight as well as height and can be normalized to compare you to the average "healthy" person. Anything under a BMI of 18.5 is considered underweight, while a BMI greater than 30.0 is considered obese. A BMI is calculated as a persons weight, which gives a proxy for how well fed that person is, divided by that persons height squared, which, in a sense, adjusts for natural body weight and gives you a 3-D dimension. However, it is important to note that this is an imperfect measure for capturing hunger or micronutrient deficiency.
  26. 26Why is anemia particularly prevalent in India? (Check all that apply.) a) There are high levels of undernourishment in India resulting in low intakes of iron b) Many Indians are vegetarian c) A main staple in India is rice, which inhibits the absorption of irona + b + c Anemia is caused by an iron deficiency, which is carried in the body by hemoglobin. Undernourishment is pervasive in India, and often results in people suffering from lower iron levels and anemia. In addition, since many Indians are vegetarian, and iron is found in high rates in meat, Indians have a hard time including iron in their diet. Finally, rice has chemicals called phytates, which actually inhibit the absorption of iron. Since rice is a staple in India, this further exacerbates the iron deficiency problem in India. Therefore, all three answers are correct.
  27. 27Fill in the blank. Food price inflation affects the poor ___ than the rich. a) More correcto b) Less c) The samea - Price increases affect the poor more than the rich because food forms a larger proportion of the poors overall budget and spending. Hence the real price increase (i.e. the increase relative to the size of their budget) is much larger for the poor. Conversely, housing prices might affect the rich more than the poor since the rich are more likely than the poor to spend a significant proportion of their income on the purchase of a house.
  28. 28What are some possible ways of assessing whether a population suffers from malnutrition? (Check all that apply. a) Food consumption compared to typical calorie requirements b) Years of education c) Body Mass Index (BMI) d) Rates of anemiaa + c + d - What is hunger? How do we measure it? It is difficult to define and measure hunger. Nevertheless, it is important to attempt to measure hunger in the world, and there are several strategies to do so. Some organizations, such as the Food and Agricultural Organization of the United Nations (FAO), estimate the typical calorie requirements for individuals. Others use body mass index (BMI) which calculates a standardized measure using height and weight. And then there are nutrition-related illnesses, such as iron deficiency anemia, which should also be considered.
  29. 29What does the following expression represent? nutrition = g(income today) a ) The amount on income generated today based on your nutritional intake today b ) The amount of nutrition you consume tomorrow based on your nutritional intake today c) The amount of nutrition you consume today based on the amount of income you generated today d ) The amount on income you will generate tomorrow based on the amount of income you generated todayc - In this expression, we see that nutrition is a function of income today. The function g represents the mathematical relationship between income today and food consumed. G describes how income today translates into consumption of food. For example, if you are richer today, you will also be able to buy and eat more food. It is essential to understand this relationship, since we can extend this function one step further. If your income today maps to your nutrition today, and your nutrition today maps to your work ability and income tomorrow since good nutrition gives you strength to work (i.e. income tomorrow = f(nutrition)) then you can say that income today maps to income tomorrow. That is the essential point here. We need to understand the underlying relationships and their strength to understand where the nutrition-based S-curve comes from.
  30. 30For most households, we expect the share of food in the budget to be: a) Decreasing with income; the more money a household makes, the relatively less they spend on food b) Proportional to everything else; A household spends an equal share on food even as their income increases c) Increasing with income: there may be some fixed expenditure they have to take care of, and beyond that point they can spend the rest on food.a - Poor households tend to spend a high proportion of their income on food. As they become richer, they shift some of that spending away from food and instead spend some a higher proportion on other things. This is known as the Engel Curve for food. In general, an Engel Curve describes the relationship between household expenditure on a particular good and household income.
  31. 31Among the poorest households, if household members face an S-shaped curve and are on the wrong side of it, we should see that the share of food in total expenditure is: a) Decreasing with income: the more money they make, the less (relatively) they spend on food b) Proportional to everything else: they spend an equal share on food even as their income increases c) Increasing with income: there may be some fixed expenditure they have to take care of, and beyond that point they can spend the rest on foodc - The poorest households may first have to take care of basic expenditure categories instead of buying additional food. If such a poor household is below a certain nutritional threshold, then there could be a huge potential return from increasing food expenditure, particularly if the additional food consumption could bring them above that nutritional threshold and enable its members to escape from a nutrition-based poverty trap. In this situation, the household may choose to dedicate any additional income to purchasing food. In this case, we would see that as incomes rise, the share of the budget spent on food will increase. This is in contrast to the standard Engel curve, which describes the case where the share of income spent on food declines as incomes rise.
  32. 32The Engel Law refers to which of the following? a) The concept that the more money people make, the less they'll spend on food as a share of their total income b) The angles formed by two intersecting demand curves c) A description of the behavior we'd expect the poor to exhibit with regards to food spending habits d) None of the above.a - The Engel Law refers to the concept that the more money people make, the less they'll spend on food as a share of their total income. However, if the poor are indeed trapped in a nutrition-based poverty trap, then we would expect them to exhibit the opposite behavior. For households trapped in a nutrition-based poverty trap, any additional consumption of food would have relatively high marginal benefits. Thus, when a poor households income rises, we would expect the share of income spent on food to increase.
  33. 33Which is the most likely reason Indians tend to be shorter than the average American? a) Genetics b) Undernutrition c) Innate geographical differencesb - Undernutrition seems to be the reason why Indians are often shorter than average since the grandchildren of Indians living in the U.S. tend to be just as tall as anybody else, casting doubt on the traditional genetics argument. We further see that the average height of the Japanese, who were once much shorter than the average Westerner, has converged to Western norms as Japan becomes richer and more well-nourished. This further suggests that undernutrition plays a role. There is no evidence to suggest that innate geographical differences would cause Indians to tend to be shorter than average Americans. Based on research in biology and the nascent field of genetics, there may also be interaction of genes and the environment which makes these types of relationships particularly hard to tease apart.
  34. 34Professor Duflo mentions in lecture that in a certain setting, the elasticity of calorie consumption with respect to expenditure is 0.35. Which of the following interpretations is correct? a) When expenditures increase by 10%, calorie consumption increases by 3.5% b) When expenditures increase by 10 dollars, food consumption increases by 3.5 dollars c) Calorie consumption makes up about 35% of peoples budget across most of the developing world d) People in the developing world eat on average 35% fewer caloriesa - The interpretation of an elasticity of calorie consumption with respect to expenditure of 0.35 means that when expenditures increase by 10%, calorie consumption increases by 3.5%. This trend is in line with the traditional Engel Curve, showing that as income rises the proportion of one's budget spent on food decreases (i.e. the elasticity is below 1). This question is particularly tricky since you also need to understand the units of elasticity. Since both variables are in logs, the elasticity is a ratio of percentage and is unit-free. To learn more about elasticity, see the elasticity
  35. 35What does an elasticity of calorie consumption of 0.35 reveal about the poor's food consumption behavior? a) The poor fail to display the characteristics described by the Engel Law b) The poor display the characteristics described by the Engel Law c) Optimal spending on food is around 35% of ones budget in the developing world.b - The empirical data shows that as incomes rise, the poor spend less than the whole fraction of additional income on food. According to the nutrition-based poverty trap theory, the poor would be expected to spend all extra income on food to escape from the poverty trap. Hence, earlier, we said we would expect the poor to stray from the Engel Law. However, we see in the data that the poor display the exact characteristics described by the Engel Law - as their income rises they spend a smaller proportion of their income on food.
  36. 36The elasticity of overall food expenditure is 0.7. That is, if your budget increases by 10%, you will spend 7% of it on food. However, earlier we noted that the elasticity of calorie consumption was 0.35. What might explain this discrepancy? a) The formula we are using to calculate elasticity is inconsistent b) There is no discrepancy. They are just different elasticity metrics c) The poor tend to buy more expensive food as they get richer, such as meatC - C is correct. The elasticity of overall food expenditure shows that the poor do not spend all their additional money on food, though they do spend a healthy portion. An elasticity of overall food expenditure of 0.7 means that when a households budget increases by 10%, food expenditure increases by 7%. However, as expenditures increases, the household may substitute away from calorie-rich, inexpensive foods towards less calorie-rich, more expensive foods. For this reason, the same 10% increase in budget would translate to only a 3.5% increase in calories consumed. This explains the discrepancy between the elasticity of food consumption and the elasticity of calorie consumption.
  37. 37True or False: the substitution effect is always negative. a) True b) Falsea - The substitution effect is always negative since it describes the shifts from one good to another as the price of the original good increases. When you substitute to another good and do not change your overall wealth, you necessarily spend less on the original good.
  38. 38The income effect is generally ___ for a normal (or luxury) good and ____ for an inferior good. a) positive; negative b) negative; positive c) negative; negative d) positive; positivea - The income effect is positive for luxury or normal goods. Take clothing as an example. As you earn more, you may buy more clothing, and more expensive clothing. So the effect is positive. On the other hand, as you earn more, you'll have more capacity to buy nicer goods and will steer clear of inferior goods. Therefore as you get richer you will buy less packaged/cheap meals, and more high-quality meat (or go out to more restaurants). So, in this case, the income effect would be negative, since packaged/cheap meals are considered an inferior good.
  39. 39"For instance, as Sir R. Giffen has pointed out, a rise in the price of bread makes so large a drain on the resources of the poorer labouring families and raises so much the marginal utility of money to them, that they are forced to curtail their consumption of meat and the more expensive farinaceous foods: and, bread being still the cheapest food which they can get and will take, they consume more, and not less of it. But such cases are rare; when they are met with, each must be treated on its own merits." -Alfred Marshall, Principles of Economics (1890) What is a Giffen Good? (Check all that apply.) a) A good which increases in demand as the price increases b) A good which decreases in demand as the price decreases c) A good which increases in demand as the price decreasesa + b - A Giffen Good is a good where the demand varies in the same direction as price. When prices increase, the demand for that good increases. When prices decrease, the demand for that good decreases. This is surprising since the conventional demand curve is usually sloping down, where as the price of a good increases, it is demanded less. For a Giffen Good to exist, the income effect needs to be so large that it compensates for the substitution effect.
  40. 40For a good to be considered a Giffen good, why is it necessary that the good take up a large part of your budget? (Check all that apply.) a) This must be true for the income effect to overcome the substitution effect. b) This is a characteristic of a scenario where a consumer substitutes largely between a staple good and a luxury good (a typical example of a Giffen good) c) We can only find Giffen goods if there is enough data generated about them, and for this to be the case, they must take up a large part of your budgeta + b - A Giffen Good is a good where the demand varies in the same direction as price. When prices increase, the demand for that good increases. When prices decrease, the demand for that good decreases. This is surprising since the conventional demand cu
  41. 41What are the results of the Jensen and Miller (2008) paper? (Check all that apply.) a) As subsidies increase by 100 percent (hence prices decrease), consumption of rice decreases by 23.5 percent b) As subsidies decrease by 100 percent (hence prices increase), consumption of rice decreases by 23.5 percent c) While rice appears to be a Giffen good, wheat in Gangsu does not appear to be a Giffen gooda + c - Jensen and Miller indeed find that in the case of a 100% subsidy increase (hence a price decrease), consumption of rice decreases by 23.5 percent (marked as the 0.235 coefficient on the regression table). This indicates that as the price of rice decreases, the demand decreases. Thus we have an upward sloping demand curve, which characterizes a Giffen good. In contrast, the paper finds that wheat in Gangsu does not appear to be a Giffen good. The rationale for this was that in Gangsu wheat itself was not a primary staple. Rice products were more commonly consumed, and therefore the conditions for a Giffen good did not apply to wheat flour as they did for rice. You can read more about their paper here.
  42. 42A Giffen good will have _____________ own-price elasticity: consumption will decrease when the price decreases. a) Positive b) Negativea - Giffen goods, unlike other products and services, respond strangely to price: when the price rises, demand for them rises. When we say their own-price elasticity is positive, we mean that there is a positive correlation between changes in price and changes in quantity demanded. Most other normal goods have a negative own-price elasticity, where increases in price reduce the quantity demanded, precisely the definition of a downward-sloping demand curve.
  43. 43What might be an unintended consequence of subsidizing rice in developing countries in which rice is the main staple? a) If rice is a Giffen good, you might see decreased nutritional outcomes as people eat more luxury foods and less rice b) People might eat a dangerously large amount of rice as it becomes cheaper c) People might stop buying rice since they think it has lost its valuea - If rice is subsidized, it becomes cheaper. As rice becomes cheaper, people essentially become richer (have to spend less to get the same amount of rice). As a result, they might decide to buy even less rice since they can afford meat or other more expensive foods. If the luxury good which people buy as they become richer is less nutritious than rice, subsidies of rice might actually lead to a drop in nutrition. Note, however, that the welfare of the poor will be higher since they have chosen to eat less rice!
  44. 44The empirical evidence shows that the elasticity of food consumption with respect to wages with respect to food consumption is ____: a) Relatively high b) Relatively lowb - Having a relatively low elasticity of wages with respect to food consumption is simply a technical or economic way of stating that as wages increase, consumption of food increases less than at a one-for-one rate. This is surprising since you might expect the poor to be in a nutrition-based poverty trap and therefore need to eat more when given the chance in order to escape it. If that were indeed the case, the poor should spend all or most of their money on food. But in fact, we do not see this happening and instead observe a low elasticity of wages with respect to food consumption. This finding challenges the assumptions of the calorie-based poverty trap.
  45. 45Why might it be a good thing that people in India are eating less? a) India is getting skinnier and therefore more modern b) India is becoming more health conscious and therefore people are eating less, which is a sign of an industrialized nation c) India is richer, and its citizens have fewer health issues, are having fewer children, and are engaging in higher-tech work. These factors which are a result of rising wealth, require people to consume fewer calories d) Indians are better educated so they are avoiding high-calorie foods such as meat and ricec - Indeed as India becomes richer, Indians are engaging in behaviors that require fewer calories. These behaviors include higher-tech labor, having fewer children and generally being less sick. Therefore, a drop in calorie consumption might be a result of a richer India, rather than a drop in nutrition.
  46. 4633% of men and 36% of women in India have a BMI below 18.5 and are considered undernourished. Iron-deficient anemia is believed to affect 1 billion people worldwide. These statistics indicate large levels of undernourishment. Why might people be undernourished? (Please check all that apply.) a) They are not eating enough calories b) They suffer from "hidden hunger" c) These are not valid measures of undernourishmenta + b -Indeed malnutrition can arise from a lack of calorie consumption and therefore a lack of nutrients (although this is not always necessarily true). In addition, malnutrition can arise from not eating the right calories, even conditional on the calories consumed. This is called "hidden hunger." For example, if you only eat corn, but you eat a lot of it, say 2,000 calories a day, you can still be deficient in many nutrients not found in corn, leading to malnutrition.
  47. 47If people were in a nutrition-based poverty trap, what would we expect them to do when they get more money? a) Spend part of it on food, but most of it on other things (such as alcohol/tobacco, housing, education) b) Spend as much as possible on food c) Save most of itb - As we learned in previous lectures, a nutrition-based poverty trap implies a huge importance on food and the acquisition of more calories. It posits a strong relationship between calories, strength, and the ability to earn more money. By its logic, anyone stuck in such a trap should prioritize food consumption over all else. But, as weve seen, thats not always the case.
  48. 48Why might the poor suffer from "hidden hunger"? Check all that apply. a) They don't have access to all the nutrients they need b) They don't have the information they need to choose nutritious foods, even when they are available c) They don't believe or trust the information they hear about eating nutritious foods, even when they are told the information and have those foods available d) They can't afford more nutritious foodsa + b + c + d - All of the above are true. If no one eats nutritious foods, then there is no demand for nutritious foods in a specific region. Therefore the food will not be available, and the cycle continues. In addition, more nutritious food might be more expensive and therefore out of reach for the poor. A third rationale could be that the poor don't receive information about what nutrition they should eat since they are generally less educated. Finally, it might be the case that the poor don't internalize nutritional eating habits, since it is hard to measure and observe health gains as a direct result of nutritious food. For example, eating certain "healthier" rice might not yield visible gains for years to come, if it ever becomes visible. If you eat rice, and you don't look like pop-eye the sailor man right away, you don't believe that the more "nutritious" food has any value. Alternatively, beliefs about what is healthy are complex, and people may not trust what outsiders, such as the government, say is healthy or unhealthy.
  49. 49What were the results of Kremer and Miguels deworming experiment? a) Students who had more friends who had been dewormed were more likely to take up deworming treatment b) Students who had more friends who had been dewormed were less likely to take up deworming treatment c) Students who had more friends who had been dewormed were just as likely to take up deworming treatmentb - Kremer and Miguels research (Kremer and Miguel (2004)) found that students who had more friends who had been dewormed in the previous year were less likely to take up deworming treatment in the current year.
  50. 50Which of the following is a rationale for why people might choose not to get dewormed? a) The benefit of treatment might not seem to outweigh the cost of missing work to get treatment b) Deworming has been shown to have negative outcomes on nutrition c) The risk of death from undergoing deworming treatment is very higha - Indeed the observed benefit of deworming might be relatively low such that individuals decide that it is not worth missing work to go and receive treatment. They instead prefer to work and generate an income. In addition, if employers do not value deworming treatment, either since they can't see the benefits or since they don't believe that their employees are truly being dewormed (i.e. they can't verify they went to receive treatment instead of relaxing at home), they might not allow their employees to be dewormed. This latter point has been bolstered by a study that showed that employers recognize that taller people are more productive but do not recognize that better fed people are more productive. This is because unless better health translates into observable outcomes, it is hard to verify that a person is indeed more productive. However, tallness is easy to measure and observe. Therefore, if employers had an observable and immediate outcome they could measure for dewormed workers, they might be more willing to support treatment.
  51. 51Based on the lecture on childhood nutrition, what are two avenues through which childhood nutrition could have long-lasting impacts into adulthood? a) Health and Finance b) Education and Finance c) Health and Education d) Finance and fertility choicesc - When children are sick in childhood, they may miss school and learn less. Moreover, poor health in childhood may have a permanent debilitating effect on productivity into adulthood. Importantly, the nature of childhood development (and in utero development) create the potential for an S-shape where a small investment during childhood development, say in nutrition, health or education, can result in large returns later on in life.
  52. 52What percentage of the world's children suffers from worms? a) A quarter b) 50% c) We don't know since worms are invisible d) 5%a - About 25% of the world's children, or a quarter, suffers from worms. Worms are particularly prevalent in areas surrounding fresh yet dirty water. Worms are highly contagious so once one person has them, they spread quickly. Worms usually don't kill, and certain types are invisible, but can have a substantial negative impact on nutrition since they compete for food and micronutrients.
  53. 53Why was the deworming experiment randomized at the school level rather than at the individual level? a) To control for externalities and other spillover effects b) It was more cost-effective c) It allowed for increased variation by region and therefore greater external validitya - If you randomize at the individual level, then deworming half of the students will essentially rid the entire school of deworming due to positive externalities. Thus, you will not see any difference between treatment and control groups due to positive spillovers. You may then underestimate the effect of deworming. However, if you randomize at the school level you can compare the effects of deworming across schools, which should have much less overlap. In this way, you can obtain an accurate estimate of the causal effect of deworming. See Kremer and Miguel (2004).
    To learn more about randomization, see the video lessons, Randomization Part I and Randomization Part II.
    Enviar
  54. 54True or False: Deworming only impacted educational attainment a) True b) Falseb - In 2013, researchers Michael Kremer and Edward Miguel published the results of a long-term follow-up survey of the original study participants (see Baird et al. (2013).) They found a 12% increase in mean hours worked and a 20% jump in wages earned for children that were dewormed. As the authors note: These results suggest health improvements may increase labor supply and facilitate structural transformation. You can read the paper here.
  55. 55What were the effects of deworming on students? (Check all that apply.) a) Increased school attendance b) Increased labor force participation c) Increased earningsa + b + c - Dewormed students are less likely to be anemic, are taller on average, and have higher rates of school participation. In addition, students who were dewormed earned 19.1% more earnings per year when they were measured a decade later. Hence, this is presumably a lifetime gain. This may be a result of increased health, strength (dewormed students were 12% more likely to work), and gains in education (school participation for dewormed students increased by 15%, which is equivalent to 1/6 of a year).
  56. 56True or False: A study in Uganda found that children born to Muslim mothers, who were in utero during Ramadan were better educated and earned more than their peers as adults. a) True b) Falseb - Researchers Almond and Mazumder (2008) found that children born during Ramadan were, later in life, less educated and earned less than peers born in other months. This finding provides evidence that conditions experienced in the womb can have long-lasting effects on health and well-being going far beyond childhood.
  57. 57What percentage of pregnant women does the WHO estimate are anemic?a - The WHO estimates that about 40% of pregnant women are anemic. This is particularly concerning since studies show that utero conditions have large effects on children's lifetime outcomes. Therefore, being born to an anemic mother may reduce a childs educational and earnings potential. This might generate a poverty trap scenario if poor pregnant women are more likely to be anemic. In addition, if the poor are less likely to invest in iron-fortified supplements, such as iron-fortified fish sauce, there may also exist a poverty trap scenario.
  58. 58Given the evidence, better-designed food policies in the future may need to focus more on food ______ than food _________. a) quantity; quality b) quality; quantityb - As household income increases, people tend to shift their food consumption to better-tasting calories and other non-food items. These calories, while tasty, might be less efficient and no more nutritious, that is they might yield fewer nutrients per unit of money spent. For example, people may choose white rice instead of course grains which are cheaper and more nutritious. By taking this behavior into account, food policies can be more accurately targeted.
  59. 59Deworming treatment for school-age children ________________________________ a) Can increase lifetime income, but is expensive to provide b) Is cheap, but does not boost lifetime income c) Is cheap and significantly increases lifetime income d) Is expensive and does not increase incomeChildhood deworming increased earnings by 20% per year for a lifetime at a cost of only $0.65. This represents a highly cost-effective treatment. To read more about these results, see Baird et al. (2013).
  60. 60Which of the following would suggest that iron supplements for pregnant mothers may be cost-effective and beneficial? (Check all that apply.) a) Children of mothers who received iron supplements earn more when they are older b) Pregnant mothers never consume iron supplements, even when they are free c) Iron supplements are inexpensive to producea + c - We know that children of mothers who received iron supplements earn more when they are older. Coupled with the fact that iron supplements are inexpensive to produce creates a strong case that providing iron supplements for pregnant mothers may be both a beneficial and cost-effective intervention. This example represents a case where a relatively small upfront investment (iron supplements during pregnancy), can have a positive and long-term impact that outweighs the cost of the initial investment (higher earnings for children of those mothers).
    If, as presented in response B, pregnant mothers never consumed iron supplements, then such a policy would be considered wasteful.
  61. 61Which of these individuals are most likely to be hurt by an increase in food prices? (Check all that apply.) a) A middle-class commercial farmer b) A poor manual laborer living in a city c) A poor taxi driver living in a city d) A rural farmer producing a crop for which the price has risenb + c - An increase in food prices is most likely to harm urban residents who are net consumers of food (people who spend more on food than they earn from producing food). Poor manual laborers (B) and poor taxi drivers (C) living in a city are both examples of net consumers of food. Furthermore, food spending is likely to represent a large share of the total budget for poor manual laborers and poor taxi drivers. When food prices rise, they are most likely to be hurt. Rural farmers and middle-class commercial farmers, on the other hand, may be positively affected. Since the prices paid for their crop have increased, they may suddenly experience higher incomes.
  62. 62Suppose that an individual increases her income by 10% and as a result spends 4% more on food and increases total calories consumed by 2%. Based on these numbers, which is more responsive or sensitive to changes in income? a) Food expenditure b) Calorie consumption c) Both are equally responsive to changes in incomea - We know that for a given increase in income (10% in this case), that calories consumed increases by 2% while food expenditures increase by 4%. Since food expenditures change more than calories consumed in response to the change in income, we can say that food expenditures are more responsive to income. In terms of elasticities, this information tells us that food expenditure is more elastic with respect to changes in income than calories consumed. Put another way, food expenditure is more sensitive to changes in income than calories consumed.
  63. 63Suppose that an individual increases her income by 10% and as a result spends 4% more on food and increases total calories consumed by 2%. What is the elasticity of food expenditures with respect to income? (Fill in the blank, including 1 decimal place.)0,4
  64. 64Suppose that an individual increases her income by 10% and as a result spends 4% more on food and increases total calories consumed by 2%. What is the elasticity of calorie consumption with respect to income? (fill in the blank, including 1 decimal place.)0,2
  65. 65The capacity curve defines the relationship between wages earned and ________. Implicit in this relationship is that wages earned today enables _______________. a) Job opportunities; higher consumption of food or nutrition b) The capacity to work; higher consumption of food or nutrition c) Initial wealth; higher wages earned tomorrow d) The capacity to work; job opportunities for tomorrowb - The capacity curve is defined as mapping out the relationship between wages earned today and work capacity, which is closely related to the ability to work tomorrow. At very low levels of income earned today, an individual may not be able to consume enough food to have the capacity to work, hence they have low levels of work capacity. In this range, as wages earned increase slightly, individuals can consume more and the capacity to work rises steeply. At some point, individuals are well-fed and well-nourished, so that the rate of increase in productive capacity declines at high levels of wages earned today.
  66. 66Suppose the price of rice rises and the price of quinoa (a normal good that is a substitute for rice) is unchanged. Then the substitution effect predicts that quinoa consumption will ___i__ while the income effect predicts that quinoa consumption will ___ii___. Combining these two effects, we expect that overall quinoa consumption will ___iii____. a) i. Decrease; ii. Increase; iii. Increase or decrease; it depends b) i. Increase; ii. Increase; iii. Increase c) i. Increase; ii. Decrease; iii. Increase or decrease; it depends d) i. Decrease; ii. Decrease; iii. Decreasec - When the price of rice increases, quinoa becomes less expensive relative to rice. There will be a substitution effect where consumers will substitute away from rice and increase consumption of quinoa. On the other hand, there will also be an income effect that works in the opposite direction. Because the price of rice has increased, consumers will have less dispensable income to spend on other foods holding their consumption of rice constant. For this reason, we might expect consumption of quinoa to decline. The overall impact of the increase in the price of rice is ambiguous and depends on the relative size of these two effects.

Informationen

Beschreibung
Karteikarten am Ohne Titel, erstellt von Sebastián Tagle am 13/08/2018.
Erstellt von
Sebastián Tagle
Aufrufe
1
Bewertung

Feedback

Worum geht es?

Wie gefällt dir das neue Design?

Dein Eindruck