Lewis Model

Question 1

define ‘dualism’

Answer 1

coexistence of ‘traditional’ and ‘modern’

Question 2

traditional sector equated to…

Answer 2

• agri sector
• use of older techniques of production that are labour intensive and employ single instruments
• traditional forms of economic organisation based on family

Question 3

modern sector equated to…

Answer 3

• industrial sector
• use of new technology which is capital intensive
• production organised on capitalist principles

Question 4

when may the movement of labour from agri to industry be central?

Answer 4

when there is high population pressure so there are large numbers of people per acre of arable land

Question 5

why would MP of labour be close to 0

Answer 5

entrepreneur hires labour only to point where MP equals wage

Question 6

zero marginal product activity characterised by…

Answer 6

payment system that is not based on marginal product