Deck 2: Well-Being

Question 1

Which of the following cost saving activities is referred to as ex post responses to fluctuations?

A) Households spend less than earnings in an effort to "Save up"
B) Keep extra money in a mud bank
C) Take out a loan,promising to repay it with interest out of future income
D) Purchase a formal insurance

Answer 1

C

Question 2

As income levels rise,per capita food expenditure tends to_________ while the percentage of total expenditure on food tends to ________.

A) rise; rise
B) rise; fall
C) fall; rise
D) fall; fall

Answer 2

B

Question 3

Typically,which of the following sectors has a much larger share of the labor force in developing countries compared to developed countries?

A) Manufacturing,Construction and Utilities
B) Wholesale and Retail Trade and Transport
C) Agriculture and Mining sector
D) Business and Personal Services

Answer 3

C

Question 4

One of the issue facing households in developing countries is how they cope with fluctuations or shocks which can arise from all of the following except:

A) seasonal changes in weather
B) life cycle event such as marriage and old age
C) market Prices
D) consumption smoothing

Question 5

Basic foods are very important in the budgets of low income households.According to the study of Banerjee and Duflo (2007),it is common for the low income households to spend _____ of their total consumption budget on food.

A) <10%
B) 10% - 50%
C) 50% - 90%
D) >90%

Question 6

An empirical pattern known as Engel's Law states that as income levels rise,per person food expenditure

A) falls,but its share in total consumption expenditure rises
B) falls,and its share in total consumption expenditure falls
C) rises,but its share in total consumption expenditure falls
D) rises,and its share in total consumption expenditure rises

Question 7

By the World Bank definition,with income per capita of $350,Malawi is classified as a ______.

A) Low Income Country
B) Lower Middle Income Country
C) Upper Middle Income Country
D) High Income Country

Question 8

In studying the well-being,it is most common to focus on:

A) households
B) individuals
C) entrepreneurs
D) the Macro economy

Question 9

By the World Bank definition,with income per capita of $8,890,Mexico is example of ______.

A) Low Income Country
B) Lower Middle Income Country
C) Upper Middle Income Country
D) High Income Country

Question 10

Households in developing countries face lots of fluctuations and shocks.Seasonal fluctuations in agriculture means that in off-seasons farmers tend to demand less labor and supply less food which _________ wages and __________ food prices.

A) raises ; increases
B) raises; decreases
C) reduces; decreases
D) reduces; increases

Question 11

What is the normal interest rate charged on a howlats loan?

A) 0%
B) 3.5%
C) 5%
D) 10%

Question 12

In countries like Gambia,seasonal fluctuations are so profound that the last few months before the new harvest are called the:

A) "dead season"
B) "hungry season"
C) "famished season"
D) "starving season"

Question 13

Among these four countries,one would expect that the percentage of workers who are self employed,employers and family workers is:

A) highest in Indonesia
B) highest in Malawi
C) highest in Mexico
D) highest in the United States

Question 14

To identify the features of life circumstances that matter to developing country households,and then to identify the factors that constrain their pursuit of well-being,the author suggests it is useful to describe four sets of activities which are:

A) Increasing wealth,improving life expectancy,decreasing infant mortality and gaining freedom
B) Increasing wealth,fetching fresh water,improving environmental quality and building future through savings
C) Earning Income,gaining access to stable healthcare,Increasing wealth,improving life expectancy
D) Earning income,coping with fluctuations,building future through investment and acquiring goods and services

Question 15

From the study of Filmer,et al.(2000),in Zimbabwe,among women who had given birth in a rural health center,what percentage reported being hit by a nurse during delivery?

A) 1%
B) 5%
C) 13%
D) 50%

Question 16

Amanda and Bill consume the exact same quantities of every consumption item,but Amanda gets to make her consumption choice decisions on how to spend her income while Bill's consumption levels are dictated by the government.According to economist-philosophers like Amartya Sen,which of the following statement is true?

A) Amanda has a higher well-being
B) Bill has a higher well-being
C) Amanda and Bill have the same well-being since the utility from the consumption choices is the same for both of them.
D) There is no way we can compare Amanda and Bill's well-being.

Question 17

The textbook's definition of well-being is a summary assessment of all of the following except:

A) how good or bad her life circumstances are,quantities and quality of goods and services she consumes
B) how happy she is
C) the activities to which she allocates her time
D) hopes and fears regarding the future

Question 18

There are many factors that limit households' success in their pursuit of well-being.We group these "Determinants of well-being" into following categories except:

A) assets
B) needs
C) family
D) market conditions and institutions

Question 19

Howlats loans are loans that citizens borrow from:

A) the federal and local government
B) friends,relatives and neighbors
C) the central bank
D) private companies

Question 20

All of the following are considered as consumption smoothing except:

A) eating two good meals every day rather than having several three-meal days followed by several one-meal days
B) spending less on daily basis to save for dowries for daughters or bride prices for sons
C) if households have fewer or smaller fluctuations,they are willing to accept lower average consumption
D) households take out a loan to spend more than their current income even if it means they have to consume much less in the future

Question 21

Developing country households make many kinds of investment.All of the following are considered as investment except:

A) purchase physical assets such as farm land,wells for clean drinking water,or tools for repairing rickshaws.
B) purchase stocks or government bonds
C) purchase working capital such as fertilizer
D) spend money or time to acquire human assets such as acquiring education or training

Question 22

The following are examples of income smoothing except:

A) Farmers producing crops that harvest at different times during the year
B) Farmers working for neighbor's farm producing the same crops as at home
C) Famers working part time in a non agriculture job
D) Farmers using different soil qualities or farming plots of land at different latitudes

Question 23

Which is the following shows the impact of road improvement projects on well-being in Bangladesh?

A) These projects raised per capita consumption expenditure on average 7.5 and 10.8 percent.
B) These projects raised consumption expenditure at the bottom of the income distribution by more than they raised incomes higher up the distribution.
C) Estimates show that these projects reduced the time it takes for people to get to market and raised enrollment in secondary schools.
D) All of the above.

Question 24

Households' well-being levels are determined not only by the assets,but also by the nature and magnitude of their needs.Households' needs depend on all of the following except:

A) the number of dependents
B) the incidence of illness,injury and disability
C) cultural norms
D) households' income

Question 25

Changing market conditions can affect household's well-being in many ways,if money is not available in financial markets for example,small firms may not be able to invest in key parts causing a ______ of goods and the price of goods to ________.

A) Surplus; increase
B) Surplus; decrease
C) Shortage; Increase
D) Shortage; decrease

Question 26

Other than income,what is the next most common measure of a household's living standard?

A) Land
B) Real per capita consumption expenditure
C) Investment opportunities
D) Level of education of the head of the household

Question 27

Since we cannot measure well-being directly,people often turn to the most common measure of standards living which is:

A) nominal income
B) real income
C) nominal income per capita
D) real income per capita

Question 28

Which of the following constitutes a non-market interaction?

A) Jim Borrows money from a bank to purchase a plow
B) Shuman buys rice for his family
C) Jane works for Rob at his farm and earns a wage
D) Jim and Shuman cooperate to build a road together

Question 29

The magnitude of household's needs can be affected by all of the following except:

A) Households with members that are disabled or sick
B) Cultural norms regarding celebrations and other obligations
C) Income
D) Number of dependants in the household

Question 30

What is the ultimate goal in development policy making?

A) Higher Incomes
B) Higher GDP
C) Higher Well Being
D) More consumption choices

Question 31

Changing market conditions can alter a household's well-being,__________prices for output and ________prices for inputs raises potential profits.

A) higher; lower
B) higher; higher
C) lower; higher
D) lower; lower