Question from Past Microeconomics Qualifying ExamEdit
Fall 2005 - Section II, Question one, George Mason University
Since 1900 U.S. real incomes have increased dramatically while the average number of children per family has decreased. Evaluate each of the following candidate explanations for this observation possibly using opportunity sets and indifference curves between children and all other goods:
- children are inferior goods;
- children are not inferior goods but they’ve become more expensive;
- preferences have changed such that couples want smaller families and
- instead of more children couples are choosing higher quality children.