Study Questions



Study Questions

Chapters 7 (Agriculture) and 8 (Transformation)

1. Agriculture is like a “black box,” supplying labor and other resources to support industrialization, and it’s share of GDP decreases as growth occurs. Thus, investing in agriculture should not be a priority of development policies. Please critique.

2. What is the agricultural household model, and why is it useful?

3. Is the demand curve for food in agricultural households upward-sloping? If so, how can it be?

4. Why do subsistence households not participate in the market? Would they be better off if they did?

5. How can power asymmetries within households affect spending and even efficiency?

6. What are the key insights and critiques of the Lewis two-sector model?

7. Rural households tend to be diversified and the agricultural share of these households’ income is decreasing. Please give two reasons why this is important from a development policy point of view.

8. What is a CGE model, and why are CGE models more commonly used than two-sector models for policy analysis?

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