Q1) Suppose you are a farmworker couple, recently married, living in Pakistan. In a good year, you might make $600. Infant mortality rates are highyour children will have a one in ten chance of dying during their first year. The likelihood of your children attending more than a couple of years of school is also very small. Nationwide, only 38% of boys and 27% of girls attend primary school, and you are among the least likely to have access to such services. Systems of public welfare, "social security" retirement pensions, and public health care are very limited. a) What are the economic benefits and costs to you, the parent, of having children? (5 MARKS) b) On strictly economic terms, would you prefer to have two babies or five? (5 MARKS)

Q2) The profile of efficient allocation depends on the resource itself. It is known that if the resource can be extracted at a constant marginal cost, the efficient quantity of the depletable resource extracted declines over time. a) What happens if no substitute is available? (5 MARKS) b) Would this still be the case if a renewable substitute is found? (5 MARKS)