Question
You are an economist advising the prime minister of your country on development policy, particularly policy aimed at reducing hunger. Please advise the prime minister
You are an economist advising the prime minister of your country on development policy, particularly policy aimed at reducing hunger. Please advise the prime minister on the following points:
a. The prime minister wants to know whether you would recommend using individual or aggregate methods to measure undernutrition in your country. Please advise him which you would choose, why, and give an example of the specific type(s) of data you would recommend using. 7 Points
b. You are explaining how supply and demand change when other factors change to the Minister of Agriculture of your country
i. Give an example of a change in technology that would cause an outward shift (increase) of the supply curve. Which of the following figures show the associated shift in the supply curve. 5 Points
ii. Give an example of a change in income levels that would cause an inward shift (decrease) of the demand curve. Which of the following figures show the associated shift in the demand curve? 5 Points
c. The prime minister turns to you and asks, "How is understanding income elasticity of demand for food overall and for specific foods be useful to us for understanding how food markets will change in the future? 5 Points
d. You have information that the price elasticity of demand for food necessities consumed by the poor is -.6 and you are expecting a 5% price increase for these foods. Please explain to the Minister:
i. What will the change in consumption (direction of change, size of change) for food necessities among the poor be as the result of this price change? 5 points
ii. How should she expect the price change to affect the nutritional status of the poor? 5 Points
e. Your country has a GHI score of 30. Your prime minister asks you to explain what does that means? Explain to your prime minister what GHI stands for? What are the indicators used for GHI Calculation and what each of these indicators means? Finally, how is your country doing regarding the Hunger issue based on this score? 8 Points
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