Suppose the rural wage is $1 per day. Urban modern sector employment can be obtained with 5 probability and pays $2 per day
Will there be any rural-urban migration? Explain your reasoning, stating explicitly any simplifying assumptions, and show all work.
In this case the expected urban wage is equal to the rural wage. Only an individual who is risk loving will migrate.
You might also like to view...
The consumer price index (CPI), the personal consumption expenditures price index (PCE), and the core PCE have over the last 15 years
A) moved roughly together with the CPI being the most stable. B) moved roughly together with the PCE being the most stable. C) moved roughly together with the core PCE being the most stable. D) not moved together, with the CPI being the most stable.
A budget surplus means that
A. government expenditures are greater than revenues in a given year. B. government revenues are greater than expenditures in a given year. C. a nation's imports are greater than its exports. D. a nation's exports are greater than its imports.