Question 2: Consider a household in a developing country with the utility function defined by U = 4ln(X)+ln(C) where X = goods and C = Child. The net price of a child is $100, the price of X is $10 and the household income is $1000. How many children will this family plan to have? (5 points)

Number of Children: _____________

Question 3: How does GDP growth rate behave according to Malthus? How about Population growth rate? Why does this result in the Malthusian population poverty trap? Draw a graph to explain. (10 points)