DEVELOPMENT ECONOMICS (PAPER IVD)

M.A (FINAL) EXTERNAL ANNUAL EXAMINATION -

1997
1. How do you make a case for development economics as a
separate discipline?
. Discuss the general characteristics of the underdeveloped
countries?
2. Discuss the Harrod-Domar model of economic growth.
3. Critically examine the model of surplus labour as advocated
by LEWIS.
1. Distinguish between growth and economic development.
Describe the necessary prerequisites of accelerate the process of
Economic development in a developing country.
9. Capital formation is necessary but not a sufficient condition
for the economic development. Discuss this statement with
reference to Harrod-Domar theory of growth.
Using the Hared-Domar model of economic growth, explain
how population growth and technical regress might affect the
development prospects of an economy.
7. How has Arthur Lewis explained the emergences of industrial
society from an agrarian economy? Can this model be used to
explain industrial development in Pakistan?
Discuss the general characteristics of the underdevelopment
countries.
Write a short essay on the Harrod-Domar model of economic
growth.
7. Population growth is a serious problem in Third World
Countries” Discuss.

Suppose the aggregate production function with constant returns to scale is given by
the following: Y/N = (K/N)1/2, where (K/N)1/2 is the square root of K/N. a. Let K =
100 and N = 100. Calculate output per worker and capital per worker. b. Calculate
output per worker for each of the following levels of capital per worker: 2,3, and 4.
What happens to output per worker as capital per worker increases? Does it increase
at an increasing, decreasing, or constant rate?
solution
a. Y/N = (100/100)1/2 = 1 K/N = 1. b. 1.41, 1.73, and 2. Y/N increases at a
decreasing rate, which is consistent with decreasing (diminishing) returns to
capital

Trade as engine of growth

Suppose the aggregate

production function with
constant returns to scale is
given by the following: Y/N
= (K/N)
1/2
, where (K/N)
1/2
is the square root of
K/N.
a. Let K = 100 and N = 100.
Calculate output per worker
and capital per
worker.
b. Calculate output per
worker for each of the
following levels of capital
per worker: 2,3, and 4. What
happens to output per worker
as capital
per worker increases? Does
it increase at an increasing,
decreasing,
or constant rate?
Suppose the aggregate
production function with
constant returns to scale is
given by the following: Y/N
= (K/N)
1/2
, where (K/N)
1/2
is the square root of
K/N.
a. Let K = 100 and N = 100.
Calculate output per worker
and capital per
worker.
b. Calculate output per
worker for each of the
following levels of capital
per worker: 2,3, and 4. What
happens to output per worker
as capital
per worker increases? Does
it increase at an increasing,
decreasing,
or constant rate?
Suppose the aggregate
production function with
constant returns to scale is
given by the following: Y/N
= (K/N)
1/2
, where (K/N)
1/2
is the square root of
K/N.
a. Let K = 100 and N = 100.
Calculate output per worker
and capital per
worker.
b. Calculate output per
worker for each of the
following levels of capital
per worker: 2,3, and 4. What
happens to output per worker
as capital
per worker increases? Does
it increase at an increasing,
decreasing,
or constant rate?