consider figure 8.2 and 8.3 on pages 218 and 219 from the textbook. These graphs are posted on Lecture Slides for Chapter 8 as well, for your reference. Suppose in the follower country (Country 2)...

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PART A (5 marks)
Consider figure 8.2 and 8.3 on pages 218 and 219 from the textbook. These graphs are posted on Lecture Slides for Chapter 8 as well, for your reference.
Suppose in the follower country (Country 2) there is a rise in cost of copying at every level of technology gap (A1/A2), possibly caused by other factors influencing the cost of copying. Show how these graphs will be affected as a result of this new change. On your graphs you must clearly indicate the shift of the relevant curve (s) and the direction of the shift. Explain your answer in 2-3 sentences. (2.5+2.5 = 5 marks)
REFREENCE:
ANSWER SPACE:
Increase in cost of copying technology will shift the curve to the right from µi to µis.This will shift the A1 downward and A2 to the left of old curves .At new cost of copying technology steady state level in two country model decreases from (A1/A2)ss to (A1/A2)ss1
PART B: (5 marks)
Can you identify 2 meaningful reasons why leap frogging may not occur in real life scenarios. Explain clearly in few sentences why in your opinion each of these reasons may prevent Leap frogging to occur?
(2.5+2.5 = 5marks)
Leap frogging indicates a rapid change made by a company or any kind of organization to a higher level of development. In real it is difficult for a country or organisation to achieve leap fogging because the process of achieving leap frogging will be costlier and sometimes it will be inefficient.
Failure of Leapforgging in the process of shifting coal based electricity to cleaner energy solar electricity.According to Fo
es article on ‘The limits of Leapfrogging’ by Bjorn lomborg, When Greenpeace created the first 100%-solar powered community in Dharnai, India, it provided locals with expensive power that drained the system’s batteries within hours. Dharnai residents protested at being given “fake electricity”, and demanded successfully that the government supply it with “real electricity” from the coal-powered electricity grid.This indicates that Leapfrogging may not occur in real life scenario
QUESTION 2 10 marks.
Consider a production function in which only factors of production are land (X) and labour (L)
Y. Note β is the share of income paid to the landowners. Assume β = 0.33 for parts a to d.
a) Write down the production function in per worker form. (1 mark)
) Write down the above equation in growth rate form. (1mark)
c) If land resource is held constant, find the expression for productivity growth. (1 mark)
d) If income per worker has grown by 0.1% annually and population has grown by 0.2% annually, by how much the productivity has grown over a year? (2 marks).
e) Repeat part d again with β = 0.5. (1 mark)
f) Based on your answer explain the...