Image transcription text Question 1 Consider the Lewis model of dual economy. In the following diagram, labour unit is taken on the horizontal axis and
Image transcription text Question 1 Consider the Lewis model of dual economy. In the following diagram, labour unit is
taken on the horizontal axis and marginal product of labour on the vertical axis. Going right from
0M gives modern sector employment and going left from OR gives rural sector employment. The
curve MPR is the marginal product curve of rural sector and wage w is wage paid in the modern
sector. The curve A1B1 is the modern sector marginal product curve in period 1. A1
0M OR For the following questions, you can draw additional diagrams if needed. (a) [4 points] Consider period 1. Determine the amount of labour the modern sector ﬁrm
employs, the total output, cost of labour and its proﬁt in period 1. (b) [5 points] Brieﬂy explaining the process of capital accumulation, in the diagram determine
what happens (in terms of marginal product, labour employment in the two sectors) in a future
period T that corresponds to the "turning point" of the economy. (c) [5 points] Determine what happens (in terms of marginal product, labour employment in the
two sectors) in a future neriod T + 1 that is after the neriod T of turning noint.
How it Works
It only takes a couple of minutes to fill in your details, select the type of paper you need (essay, term paper, etc.), give us all necessary information regarding your assignment.
Once we receive your request, one of our customer support representatives will contact you within 24 hours with more specific information about how much it'll cost for this particular project.
After receiving payment confirmation via PayPal or credit card – we begin working on your detailed outline, which is based on the requirements given by yourself upon ordering.
Once approved, your order is complete and will be emailed directly to the email address provided before payment was made!