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1. People often argue that there is a shortage of child care. Using the model of demand and supply, evaluate whether this argument is likely to be correct.
2. During most of the past 50 years the United States has had a surplus of farmers, and this has been the root of the farm problem. Comment.
Ans- 1.Using the simplest of first principles, a shortage of child care implies that the present supply is not able to meet the requisite demand, thus there is a dearth of child care,but we are interested in the intuition behind it. the argument seems to be correct in the wake of an ever increasing service sector where female participation is on a surge, thus wome spend more time outside their homes and as a result, more and more child care is required. 2.The surplus of farmers implies that…

farm produce will be divided and more the division, more the loss.Moreover, more farmers also implies lower subsistence wages to the farmers, but an argument which is often neglected is that more the division, lesser the risk of loss to each farmer.Thus division of output accompanies division of riska and thus nullify each other.

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