Chapter 10: The Global Economy

Question

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Page(s) 386-387
10.6. Apply the theories of key thinkers on class and inequality to real-life situations.
A map of South America with Cochabamba, Bolivia labeled.Identify each person in Cochabamba, Bolivia, as working in the formal economy or the informal economy.
Formal Economy
Hernando rents a narrow stall in the central pavilion and sells fruits and vegetables.
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Anneli sells trinkets to tourists from a portable cart, hoping to win their business away from the stall merchants.
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Juanita is a police officer who monitors the pavilion for illegal sales.
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Lola sells bananas to tourists from a cart attached to her bicycle.
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Informal Economy

Answer 1

**Chapter 10: The Global Economy**

**Page(s) 386-387**

**10.6. Apply the theories of key thinkers on class and inequality to real-life situations.**

Using a map of South America with Cochabamba, Bolivia labeled, we need to identify individuals as working in either the formal economy or the informal economy:

**Formal Economy:**
1. **Hernando** rents a narrow stall in the central pavilion and sells fruits and vegetables.
- Being a stall renter in an official market setting often involves permits and adherence to regulatory standards, classifying Hernando's work as part of the formal economy.

2. **Juanita** is a police officer who monitors the pavilion for illegal sales.
- Employment as a police officer is considered formal as it involves a structured role within the municipal government, complete with regulations and official pay.

**Informal Economy:**
1. **Anneli** sells trinkets to tourists from a portable cart, hoping to win their business away from the stall merchants.
- Selling goods from a portable cart typically bypasses formal regulations and permits, putting Anneli in the informal economy.

2. **Lola** sells bananas to tourists from a cart attached to her bicycle.
- Similar to Anneli, Lola’s mode of selling bananas from a bicycle suggests she operates without formal business permits and therefore is part of the informal economy.

These identifications draw on broader sociological and economic theories about formal and informal economic activities, where formal economies are regulated and taxed by governments and informal economies operate without such oversight.

Understanding these distinctions highlights issues of class and inequality in emerging and developing economies, demonstrating how access to formal economic structures can impact livelihood stability and economic mobility.