This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Suppose that, for example in India, a minimum wage is instituted in the modern sector above the ... (Read 38 times)

Lobcity

  • Hero Member
  • *****
  • Posts: 524
on: Jun 30, 2018
Suppose that, for example in India, a minimum wage is instituted in the modern sector above the market clearing wage, while the rural traditional wage is market determined at a lower level than in the modern sector.
 
  (a) Describe the impact of this policy on the rural labor force, urban unemployment, and the rural wage.
  (b) Will the modern sector wage be equal to the traditional sector wage after markets equilibrate through migration? Explain.
  (c) What effect might moving costs have on the equilibrium you described in part (b)?
  (d) What effect might the introduction of factories to rural areas have no the equilibrium you described in part (b)?

Question 2

Explain the dynamic rationale for economic integration among developing countries.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

josephsuarez

  • Sr. Member
  • ****
  • Posts: 323
Reply #1 on: Jun 30, 2018
Answer to Question 1

(a) Use of the Todaro model is called for here. The rural wage will not necessarily change despite a reduction in the rural labor force as a result of migration. The minimum wage in the urban sector will encourage migration until the expected urban wage is equal to the rural wage. Urban unemployment will rise, both from migration and the minimum wage.
(b) Expected, not actual, urban wages will equal rural wages after equilibration.
(c) With moving costs, there would be less migration.
(d) With rural development, there would be less migration if this increased the rural wage.

Answer to Question 2

Similar to the infant industry argumentsee the chapter.


Lobcity

  • Member
  • Posts: 524
Reply 2 on: Jun 30, 2018
Wow, this really help

Laurenleakan

  • Member
  • Posts: 309
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

In inpatient settings, adverse drug events account for an estimated one in three of all hospital adverse events. They affect approximately 2 million hospital stays every year, and prolong hospital stays by between one and five days.

Did you know?

Once thought to have neurofibromatosis, Joseph Merrick (also known as "the elephant man") is now, in retrospect, thought by clinical experts to have had Proteus syndrome. This endocrine disease causes continued and abnormal growth of the bones, muscles, skin, and so on and can become completely debilitating with severe deformities occurring anywhere on the body.

Did you know?

The effects of organophosphate poisoning are referred to by using the abbreviations “SLUD” or “SLUDGE,” It stands for: salivation, lacrimation, urination, defecation, GI upset, and emesis.

Did you know?

More than 2,500 barbiturates have been synthesized. At the height of their popularity, about 50 were marketed for human use.

Did you know?

Earwax has antimicrobial properties that reduce the viability of bacteria and fungus in the human ear.

Cheetah front and hind feet, as illustrated in Pocock's The Fauna of British India, including C Cheetah front and hind feet, as illustrated in Pocock's The Fauna of British India, including C
East Africa-Arabia: An Example of Modern Rifting East Africa-Arabia: An Example of Modern Rifting
Three phylogenetic representations of modern human origins. Three phylogenetic representations of modern human origins.
Work and Gender: Women at Work in India Work and Gender: Women at Work in India
The origin and spread of modern H. sapiens, reconstructed from genetic and fossil evidence. The origin and spread of modern H. sapiens, reconstructed from genetic and fossil evidence.
Adaptive alleles in modern humans Adaptive alleles in modern humans
Video: Erythropoietin (EPO)

For a complete list of videos, visit our video library