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Todaro migration model

Todaro migration model

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Part 1: True/False/Explain. For each question, follow these steps. First, define or explain precisely any terms or concepts that are underlined, with a focus on the particular context in which they are being used. Second, state whether the statement is true or false, and explain why. Include diagrams or examples as part of your example, if appropriate. Concise answers are preferred over wordy ones. Todaro migration model a. Write out the equation for the Todaro migration model and give the intuition behind it. b. Suppose the urban wage is $8/day, the rural wage is $6/day, and the cost of migration averages out to about $1/day. If rural employment is 90%, how high can unemployment be and yet still some individuals will choose to migrate to the cities? c. Now suppose all the values are the same as the above, except the urban wage is now $12/day. If rural employment is 90%, how high can unemployment be and yet still some individuals will choose to migrate to the cities? d. What does your answer tell you about the dynamics of unemployment over time in cities in LMICS as incomes rise? e. What does it tell you about the importance of rural development?
Transcribed Image Text:Part 1: True/False/Explain. For each question, follow these steps. First, define or explain precisely any terms or concepts that are underlined, with a focus on the particular context in which they are being used. Second, state whether the statement is true or false, and explain why. Include diagrams or examples as part of your example, if appropriate. Concise answers are preferred over wordy ones. Todaro migration model a. Write out the equation for the Todaro migration model and give the intuition behind it. b. Suppose the urban wage is $8/day, the rural wage is $6/day, and the cost of migration averages out to about $1/day. If rural employment is 90%, how high can unemployment be and yet still some individuals will choose to migrate to the cities? c. Now suppose all the values are the same as the above, except the urban wage is now $12/day. If rural employment is 90%, how high can unemployment be and yet still some individuals will choose to migrate to the cities? d. What does your answer tell you about the dynamics of unemployment over time in cities in LMICS as incomes rise? e. What does it tell you about the importance of rural development?
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