Concepts: Human capital, opportunity cost, fiscal policy, fiscal multiplier
Background: William is excited to go to school. However, he learns that his father, Trywell, is struggling with school fee payments.
Question 1: Which factor of production is William contributing to? Use the Solow model and its production function to explain the relationship between this factor of production and the country’s output.
Question 2: Trywell tries to save money for school tuition. What is the opportunity cost of sending William to school?
Question 3: Should the Malawian government pay all pupils’ school fees? Using the fiscal multiplier, explain why some countries spend money on education programs.
Background: The Minister for Justice discusses with advisors the causes of the explosion of a residential house. The cause seems to be a gas leak and no public funds were allocated to fix the problem. In this clip, we understand that gas leaks were a well-known problem.
Question: Discuss the reasons why the government did not invest in fixing gas leaks in this area. Can we expect a government to fix every problem of similar importance in a timely fashion? Should the government invest in infrastructure projects during economic downturns?
