Description
For this assignment, you will:
Read the following article about economist, Sir W. Arthur Lewis.
https://www.un.org/en/chronicle/article/w-arthur-lewis-pioneer-development-economics
Write a 500-word paper addressing the following points (a paper is not a bulleted list with answers):
What was the question Sir Arthur Lewis kept coming back to since his time growing up in St. Lucia regarding labor and wages?
Describe and define opportunity costs.
What did Sr Lewis suggest with his models regarding wages and opportunity costs?
What is comparative advantage?
When looking at comparative advantage, what did Sr Lewis argue a small and densely populated country like Jamaica should do?
What role did Sr Arthur Lewis suggest the governments of developing nations should play?
Create a graph using excel showing what will happen to the Supply & Demand curves for labor in a developing economy as more workers move from lifestyles of subsistence-based agriculture to work in industrialized industry, ceteris paribus. In your paper, describe what happens to price and quantity of labor after the shift. (Copy/Paste this graph into your word document along with your paper)
Create a second graph using excel showing what happens to the labor market when other countries are interested in purchasing more goods from this economy, ceteris paribus. In your paper, describe what happens to the price and quantity of labor after the shift. (Copy/Paste this graph into your word document along with your paper)
So we drew both of these graphs with ceteris paribus in mind. In reality, both of these situations you’ve graphed are happening simultaneously, to different degrees or strengths, when a country begins to develop and integrate with the global economy. Given what these two graphs show, which of the two events is having the biggest impact when wages are stagnate or falling, and which of the two events is more influential when wages begin to rise? Explain this in your paper when talking about the graphs.
Explain in your paper when Sir Author Lewis predicts this transition will occur within a labor market (in general terms)?
Note on creating your graphs:
They have to be made in excel. The graphs will have a line for supply, for demand, and lines for any shifts you make. Refer to the supply and demand graphs within the book. I’ll expect your graph to be pretty much identical to those in the book but with the price and the quantity of labor on the axes. Also, you must label which of the lines is your demand and which is your supply for labor within this economy. (Again, you’ll need to copy/paste the graphs into your paper and explain what’s going on in the graphs, in words, within your paper)
To help you get started, take a look at this video explaining the basics of creating graphs using excel. I’d only add that I will not want numbers on the y or x axes since this a generalized model, so make sure to “hide” those after creating your graphs. (Youtube is a great resource for learning how to do things in excel for this and other classes. Your professors will expect you to use Youtube or other resources to learn whether they tell you to or not.)