The conventional wisdom for urban economic development is: “Don’t put all your eggs in one basket. Diversify the economy.” To explain the idea of diversification, consider old McDonald, who must carry a dozen eggs from the barn to the house. The ground between the barn and the house is slippery, so there is a 50 percent chance that McDonald will slip on a given trip and break all the eggs in his basket. Consider two strategies: a one-basket strategy (a single trip with all 12 eggs) and a two-basket strategy (two trips, with 6 eggs per trip). INDEPTH ANSWERS. Questions= (1.)List all of the possible outcomes under each of the strategies. Question (2.)What is the expected number of delivered (unbroken) eggs under each strategy ? Question (3.)What are the trade-offs between the two strategies? If you were McDonald, which strategy would you adopt?
The conventional wisdom for urban economic development is: “Don’t put all your eggs in one basket. Diversify the economy.” To explain the idea of diversification, consider old McDonald, who must carry a dozen eggs from the barn to the house. The ground between the barn and the house is slippery, so there is a 50 percent chance that McDonald will slip on a given trip and break all the eggs in his basket. Consider two strategies: a one-basket strategy (a single trip with all 12 eggs) and a two-basket strategy (two trips, with 6 eggs per trip). INDEPTH ANSWERS.
Questions= (1.)List all of the possible outcomes under each of the strategies.
Question (2.)What is the expected number of delivered (unbroken) eggs under each strategy ?
Question (3.)What are the trade-offs between the two strategies? If you were McDonald, which strategy would you adopt?
Question (4.)What are the lessons for economic development strategies?
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