Econ 230 mid term 2

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Econ 230 mid term 2
2013-03-20 23:55:02
Econ 230

ch 5 - 10
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  1. Gini Coefficient
    Area between Lorenz Curve and and Line of equality. Shaded area divided by triangle. Larger number, means highly unequal.
  2. Lorenz Curve
    Graph depicting the variance of the size distribution of income from perfect equality.
  3. Kuznets' inverted U hypothesis
    inequality will worsen and then improve as a country grows.
  4. Modern Sector Enlargement
    • Inequality would first rise and then fall
    • The lorenz curves will cross, cannot make unambiguous statement about change in relative inequality, may worsen or improve.
    • Happening in China, Taiwan, Korea
  5. Modern Sector Enrichment
    • Inequality will steadily rise
    • economy grows but growth is limited to a fixed number of people, workers and wages held the same.
    • no change in povery, lorentz curve shifts downward
    • happening in Latin America and Africa
  6. Traditional Sector Enrichment
    • Inequality will steadily fall
    • Lorentz curve shifts in
    • growth in traditional sector, none in modern
    • Low income low growth
    • Like in Sri Lanka and India
  7. Poverty Gap
    Percentage of a Country's total consumption necessary to bring everyone in the country below the poverty line up to the line.
  8. Functional Distribution of income
    The distribution of income to factors of production without regard to the ownership of the factors.
  9. Malthusian population trap
    • Resources grow arithmetic rate
    • Population grew at geometric rate
    • ignore technological advancement
    • does not stand up to modern empirical testing
    • completely macro approach ignoring micro decisions and circumstances
  10. Green revolution
    The boost in grain production associated with scientific discovery of new hybrid seed varieties of wheat, rice, and corn.  Resulting in higher yields in many developing countries.
  11. African Farming
    • Mostly subsistence farming
    • problems include:
    • Small amounts of cultivatable land by families
    • Shifting cultivation taps out land
    • Labor is scarce during harvest, because its so big due to only one rain season.