ECONOMICS
ECONOMIC DEVELOPMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
the modern sector increases its output share relative to the traditional sector.
|
|
|
agricultural sector uses modern equipment.
|
|
|
agricultural sector hires labor economically
|
|
|
modern manufacturing sector is labor-intensive.
|
Detailed explanation-1: -Answer» A. The modern sector increases its output share relative to the traditional sector.
Detailed explanation-2: -Lewis’ model showed that low wages and poverty in a labour surplus economy will persist so long as the opportunity cost of labour to the capitalist sector remains low.
Detailed explanation-3: -The assumption in the model is that the capital sector expands by absorbing unlimited labour supply in the subsistence sector (Hirota, 2002). In this model labour moves from the traditional to the modern sector with an infinite elasticity of supply (Lewis, 1979).
Detailed explanation-4: -The Dual Sector model, or the Lewis model, is a model in Developmental economics that explains the growth of a developing economy in terms of a labour transition between two sectors, a traditional agricultural sector and a modern industrial sector.
Detailed explanation-5: -“Surplus labour” (or disguised unemployment) means the existence of such a huge population in the agricultural sector that the marginal product of labour is zero. So, if a few workers are removed from land, the total product remains unchanged.