4.3 - Lewis Model Flashcards
1
Q
What was the idea Arthur Lewis proposed regarding economic structure?
A
A dual economy
Rural agriculture
Urban manufacturing sectors
2
Q
How did Lewis suggest the early economy would develop?
A
Majority labour employed on land
Land fixed
Labour variable
DMR eventually set in
3
Q
What do these DMR result in?
A
Insufficient tasks
Reduced marginal product
Underemployment
4
Q
What did Lewis suggest would tempt agricultural workers to shift to manufacturing?
A
Higher output value gives higher wages
5
Q
What does the Lewis model believe will eventually happen to the economy?
A
Rapid rural-urban migration
Transfer of agri sector to manufacturing
