Compare the problems in achieving growth in an advanced nation with those of a developing nation. Do these problems differ in degree or in kind? Explain.
What will be an ideal response?
The problems differ in kind, but also in degree. The basic problem of the poor countries is poverty itself. They have little ability or incentive to save, and therefore there is little available for investment in physical or human capital. Lack of either form of investment inhibits change and the cycle of poverty continues.
Achieving higher growth rates in advanced nations also requires more investment in both human and physical capital in order to raise productivity. But the requirement is for an expansion of investment, not for an entire transformation of society from the vicious circle of poverty.
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Suppose local educators argue that teachers' salaries are too low. At the same time it is said that the school district received 750 applications for 5 new openings. Are salaries too low? Explain
What will be an ideal response?
Your neighbors have offered to pay you to look after their dog while they are on vacation. It will take you one hour per day to feed, walk, and care for the dog, which you can do either before or after you go to work. Your regular job pays $10 per hour, and you can work up to eight hours per day. The smallest amount of money you would accept to look after your neighbor's dog is equal to:
A. $15 per day, because overtime wages are generally 1.5 times your regular wage when you work more than eight hours a day. B. the value of one hour of leisure, which is greater than zero. C. zero, because your regular job is not available for more than eight hours per day. D. $10 per day, because that is your opportunity cost of one hour of work.