Explain the role of risk and uncertainty in an analysis of the economic behavior of peasant farmers. What kinds of questions does this analysis enable us to answer?
What will be an ideal response?
Answers may be expected to vary according to lecture topics, with some discussion of why peasant production decisions are rational. See the section in the text that discusses sharecropping.
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A member of a cartel like OPEC has an incentive to
A) support equal production quotas for each member. B) argue for larger production quotas for each member of the cartel. C) abide by its individual production quota. D) agree to a low cartel production level and then produce more than its quota.
In the absence of technological progress, we know that the level of output per worker in the steady state will
A) increase over time. B) remain constant. C) decrease as a result of decreasing returns to scale. D) increase or decrease, depending on the rate of saving. E) increase or decrease, depending on the rate of depreciation.