ECON 101 Tutorial: Week 15

Shane Murphys.murphy5@lancaster.ac.uk

Office Hours: Monday 3:00-4:00 – LUMS C85

Outline

• Roll Call• Problems• Exam Notes

Chapter 22: Problem 3

UK income per person today is roughly four times what it was a century ago. Many other countries have also experienced significant growth over that period. What are some specific ways in which your standard of living is likely to differ from that of your great-grandparents?

Chapter 22: Problem 5

Suppose that society decided to reduce consumption and increase investment.a) How would this change affect economic growth?b) What groups in society would benefit from this

change? What groups might be hurt?

Chapter 22: Problem 7

What is the opportunity cost of investing in capital? Do you think a country can ‘over-invest’ in capital? What is the opportunity cost of investing in human capital? Do you think a country can ‘over-invest’ in human capital? Explain.

Chapter 22: Problem 8

Suppose that a car company owned entirely by South Korean citizens opens a new factory in the north of England.a) What sort of foreign investment would this

represent?b) What would be the effect of this investment on

UK GDP? Would the effect on UK GNP be larger or smaller?

Chapter 22: Problem 10

International data show a positive correlation between political stability and economic growth.a) Through what mechanism could political stability

lead to strong economic growth?b) Through what mechanism could strong economic

growth lead to political stability?

Wealthier is Healthier

• Preston’s 1975 Paper suggests as nations GDP increase, so to does the level of health.– Other work has suggested this might not be true.

Why not?

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Exam Notes• I should have finished grading by this point

and might have a few words to say about the second exam.