Development Economics Midterm Exam -
Q1. The following income distribution data are for Brazil.
|
Quintile
|
Percent Share
|
|
Lowest 20%
|
3.0%
|
|
Second quintile
|
6.9%
|
|
Third quintile
|
11.8%
|
|
Fourth quintile
|
19.6%
|
|
Highest 20%
|
58.7%
|
|
Highest 10%
|
43.0%
|
(a) Brazil's national income is about $300 billion. What is the approximate dollar income of the bottom 20%? Bottom 40%?
(b) Explain how to find the Gini coefficient, graphically.
(c) Carefully graph the Lorenz curve, labeling the axes.
(d) Brazil's population is approximately 150 million. Suppose that each household makes the average income for its quintile. What is the level of poverty if the poverty line is $400 per capita?
Q2. Carefully explain the term "poverty trap" and discuss its importance for policy.
Q3. Explain the reasons for the hidden momentum of population growth and state its implication for population levels.
Q4. Empirical findings suggest a weak link between income and the intake of micronutrients. In other words, the income elasticity of the demand for calories seems to be small. Discuss some of the explanations for this "apparent" puzzle.
Q5. Early-childhood environmental factors are said to be important determinants of economic outcomes such as school performance and personal income. Discuss the importance of the so-called "low-hanging fruits" for this relationship, providing some examples.