: Answers to this question can vary depending on the background of the student.

Possible

responses include: (1) a greater understanding of economic principles that are

important to economic development; (2) why there are differences between countries

in average economic welfare and its dispersion; (3) what it means to live in the

developing world that encompasses more than two-thirds of the world's population;

and (4) efforts to gain insights into a developing economy that the student knows

well.

2. Why is studying economics so central to understanding the problems of developing

countries?
Answer: Economics is the science of choice in allocating scarce resources to

unlimited wants. Economics is central to understanding developing countries, since

these countries have extensive needs with very scarce resources, necessitating

difficult choices. As economics improves the making of choices in LDCs, their

problems will be less severe. Economic analysis focuses on ways to improve the

material well-being of the population, and the past experience of economies trying to

improve economic performance.

3. What impact might rapid economic development have on the lifestyle of Balayya’s

family?

Answer: Balayya's family is involved in farm labor. True economic development

involves improving the economic position of the bottom one-fourth to one-half of the

population. Development for the masses will improve Balayya’s family’s average

economic welfare and increase the likelihood of migration to areas of India with

better economic opportunities.

Kolkata’s marginally employed