1. Alex works as a freelance journalist and earns about $0.50/word for his articles. A 1,000 word piece usually takes him about 8 hours of research and about 2 hours of writing. Carmen works as a computer programmer and earns $65/hour. Carmen and Alex just bought a new house and they want to paint the interior. The job would take Alex 10 full 8-hour days. Carmen is better at painting and the job would only take her 8 full 8-hour days.

Calculate each partner's opportunity cost of painting the house.

Who has the absolute advantage in painting the house? Who has the comparative advantage?

A painting company quoted the couple $4200 to do the job. Who should paint the house? Carmen, Alex, or should they outsource to the company?

2. Consider the assumption that children are a normal good.

Under this assumption, what is the impact of increasing incomes on desired fertility? Draw a graph to support your answer.

Under this assumption, what would be the impact of abolishing child labor on desired fertility? Draw a graph to support your answer.

Consider the fact that lower income countries tend to have higher fertility rates and higher desired fertility than higher income countries. Is this fact consistent with or does it contradict the stated assumption? Support your argument of consistency or discuss what can explain the contradiction using 2-3 facts or concepts you have learned in this course.

3. Describe the trends in fertility rates from 1960 to 1980 and from 1980 to 2000 in three regions: a) North America, b) South Asia, and c) Sub-Saharan Africa. Identify at least three interesting facts about how fertility trends compare across these regions (make sure to include each region at least one time in your analysis). To strengthen your response, discuss factors that contributed to the direction and speed of these various changes.