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ECON 3840

Homework #3

70 points

FIRST AND LAST NAME. Rawan Hassan A Alawami

1) Ceteris paribus, when a woman’s opportunity cost of having another child goes up,
which of the following would be true about the likelihood of a woman having this child?
Answer: (6 points)
She is more likely to have a child
She is less likely to have a child
She is indifferent between having or not having a child

2) List and briefly explain at least 3 reasons that explain why women very often play a
central role in economic development (in the country’s transition to a higher average income
level).
Answer: (6 points)

 Women almost count for the 50% population of a country. If such a number of
people remain idle, then economy can not boost up, so active participation of
women in economic activity raises the economic performance of a nation.
Working females increase the household economy, as their earnings adds to the
family income.
 Micro industries are flourished because of the female participation in developing
countries, Bangladesh is the prime example, where small garment industries at
home contributed in the economic growth of the country and it improved the
income level of the family and now country is seeing rising per capita income.
 Educated females can brought up their family nicely and this leaves the impact
upon the members of the family and their efficiency improves that ultimately
contributes in the economic development. We see the developed countries have
more females highly educated as compared to third world countries and those
countries are having less trained idle workforce lacking training, innovation and
sewer health and ethical issues as well. These factors are making the difference
between the economic development of developed and developing countries.
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3) Some argue that government policies to keep the price of staple foods low (please refer
to the textbook for the definition of staple food) help reduce poverty and inequality in the
developing countries. Provide and briefly explain at least 2 arguments that support the idea that
such a policy would achieve its poverty and inequality reduction goals and 2 arguments against
this policy.
Answer: (12 points)
ARGUMENTS IN SUPPORT OF THIS POLICY:
 Low staple food prices help the people to buy the food items and make the food
available for everyone, this reduces the number of people without food as it is
available at easy prices. People have less spending on food items and have more
funds for other things like education and health. So, it makes access easy to
necessities of life and reduces the poverty.
 Low prices keep the flow of capital even-steven, that means no particular group
of society takes the advantage, because of nonexistence of inflation as the major
spending are about food. People having more savings, financially feels sound
that eliminates the economic inequality in people.

ARGUMENTS AGAINST THIS POLICY:

 Keeping the staple food items price low, unjustly without facilitating the
producer acts as a demotivating factor to the producers of these food items. This
brings economic adversity to that group of people.
 It will urge the people to produce less, that will instigate the issue of supply of
food items, low priced food items will urge the producers to cut short the growth
of food items and this will lead to short supply to the market, that ultimately will
leave the negative impact upon the food prices, short supply and high demand
will lead to high food prices.

4) Why might it be in the direct economic interest of the U.S. and other developed nations
to finance rain forest conservation programs in the Amazon river delta?
List and briefly explain at least 5 reasons. Make sure that each of your answers is very specific
and that your answers are not similar to each other.
Answer: (5 points)

 It will reduce the impact of industrial activity conducted by these countries, as the
developed countries have the industries contributing in environmental issues.
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 It will make the forest to contribute in consuming the carbon and produce more oxygen
required for life on planet earth.
 It will continue to reduce the severity of weather, as forests cause the rains that make the
weather pleasant.
 Forest will continue in preserving the environment and controlling the temperature of
the earth, that is reported to be rising and causing the glaciers to melt and rise in sea
level is reported.
 It is providing shelter to many species, and if this forest is destroyed then those species
will also be wiped out from the face of the earth.

5) Provide at least 1 example of sustainability (please refer to the textbook for the definition of
sustainability) that you have come up with in your personal or professional life and explain in
detail how it was achieved or what is being done to help achieve it.
Answer: (5 points)

Preservation of environment is badly required today, as industrial activity of humans is running

the environment. Rising levels of pollution in the environment is badly affecting the life on
planet earth. High emission of carbon is contributing in green house effect and is raising the
temperature of earth that is a threat for life on planet earth. More and more forests plantation, is
required to sustain the environment and to keep it fit for life. Humans should use the green
energy rather than fossil fuels in order to control the rising levels of carbon in the environment.

6) Why is water pollution an impediment to economic development? List and briefly explain at
least 6 reasons. Make sure that your answers are not similar.
Answer: (6 points)

 It is making the land barren and reducing the land available for cultivation of crops. This
is causing the reduction in food production and thus making shortage of food supplies.
 It is threatening to lives of creatures living within water.
 Crops irrigated with polluted water are not fit for consumption for living beings.
 Polluted water is causing many types of illness to humans, hepatitis is very common in
third world countries where quality of useable is not good. It is reducing the efficiency of
labor and thus it is one of the major impediments to economic development.
 It is also making the sea food filthy and it become not fit for human consumption.
 Hard water is also disturbing the efficiency of machines, when it is used as cooling agent
within these machines. Thus, the performance of those machines reduces and
productivity reduces which acts as an impediment to economic growth.
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7) Corruption is a phenomenon that is present in almost every country. However, its degree and
scope are significantly different in most of the developing countries, compared to the developed
ones. You can refer to the additional corruption-related files posted in Week 10 folder to answer
this question.
a) Refer to “2018_CPI Executive Summary” file in Week 10 folder. Which 3 countries were the
most corrupt in 2018?
Answer: (6 points)

Somalia
Syria
South Sudan

b) There are definitely some similarities between countries that are usually highly corrupt. List
and briefly explain at least 4 reasons that increase the country’s probability of being
significantly corrupt.
Answer: (8 points)

 Political instability existing in a country make it more vulnerable to the issue

of corruption.
 Dictatorship regimes are also vulnerable to corruption issue, as those regimes
lacks the accountability.
 High poverty levels existing in the country. This lures the people to the
corrupt practices to gain their personal benefits.
 Lack of existence of regulations to make the corrupt elements, also encourages
the people to be involved in corrupt practices.

c) List and briefly explain at least 4 reasons why a high degree of corruption can be an
impediment to a country’s economic growth.
Answer: (8 points)

 It discourages the inflow of FDI, as investors have to pay bribes to initiate their
startups in corrupt countries and they also have fear being their assets to be theft by
the management coming from the society considering corruption as a norm.
 People don’t get active response to their regulatory work, as to build a factory, if one
is required to get the license, they don’t get facilitated in the regulatory procedures
that discourages the investor to invest in.
 It bars the people to invest into welfare work in such regions where corruption index
is high, so people remain deprived of the basic facilities, such as food, education and
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health, and hence there is no human development activity exist, which halts the
economic growth of the country as well because of non-development of its skilled
and efficient human capital.
 New industries don’t come to corrupt regions; hence people don’t get jobs and their
income levels remain poor.

d) Refer to “2018_CPI Executive Summary” file in Week 10 folder. What is the U.S. corruption
rating according to CPI? Is the U.S. a low- or highly corrupt country? Did you expect the U.S to
be ranked as such? How surprising was the U.S. rank to you compared to other developed
countries? Explain.
Answer: (8 points)

United states ranked at 22nd on the CPI_Index for corruption, with score of 71,
and it lost four points as compared to its previous year ranking, it was because of the
Trump’s regime, some of his actions were highly, ethically compromised and its social
norms were detreating that let it to lose four ranking points. Though, it is in the region
of least corrupt countries but still It is pretty surprising to me to find America at number
22, I was expecting it to be in top-10 to be the least corrupt countries. It is below many
developed countries, country being the leader of international political forces, should
have been the most ethical and least corrupt country.