ECON125 - What best describes the economic standing of the colonies

HW2 SS12020ECON125 Please answer the following multiple-choice questions:

1. What best describes the economic standing of the colonies on the eve of the Revolution?

a. The colonies were one of the richest nations in the world and had very little income inequality because of the many opportunities that existed. b. The colonies had a low per capita income and had little income inequality. c. The colonies were one of the richest nations in the world and had a significant amount of income inequality. d. The colonies had a low per capita income and had a significant amount of income inequality.

2. Today _________ countries generate average income levels that approach the

earnings of free Americans on the eve of the revolution. a. no b. relatively few c. many d. most

3. The standard of living (measured by what one can purchase with after-tax income) of free Americans on the eve of the Revolution was ______.

a. lower than in 18th -century England, and lower than most people in the “Third World” today. b. higher than in 18th -century England, and higher than most people in the “Third World” today. c. lower than in 18th century England, but higher than most people in the “Third World” today. d. higher than in 18th- century England, but lower than most people in the “Third World” today.

4. The best estimate for the size of overseas trade as a proportion of national income

in 1774 is: a. 0%-5%. b. 15%-20%. c. about 50%. d. 70%-75%.

 

 

 

5. When the colonies obtained independence, they were no longer bound by a number of English laws, including the Navigation Acts which restricted and regulated trade. What best describes the impact of the removal of the Navigation Acts for commodities that were imported from England?

a. A shift out of the supply curve and a shift back in the demand curve, which lowered prices. b. A shift out in the supply curve, which decreased the price and increased the quantity. c. A shift back in both the supply and demand curves, which decreased quantity. d. A shift back in the demand curve, which lowered both price and quantity.

6. The pace of settlement of the Old Northwest (Ohio, Indiana, Illinois, ...) was

determined primarily by the prices of a. soybeans, sorghum, and potatoes. b. gold and silver. c. corn, hogs, and wheat. d. cattle, leather, and cheese.

7. What would best characterize the relationship between corn prices, wheat prices and the public sale of western land (OH, IL, IN, MI, IA, WI, MO) between 1815- 1860? a. All three were very positively correlated.

b. Land sales increased first, which drew people to move and produce more crops, which increased the crop prices. c. As land sales increased, corn prices increased and wheat prices decreased as farmers substituted from wheat to corn.

d. Land sales were negatively related to both the wheat and corn prices.

8. What best describes westward movement of population between 1800-1860? a. The 1850s was the decade when the largest number of people moved to the west.

b. The large increase in and sales in this period was based on speculation. c. Migrants moved to the west because they were “pushed” out of the east, where conditions were getting worse. d. Corn prices were relatively low in the decades when migration to the west was largest.

9. What is not a benefit from the lower costs of transportation that were achieved through advances in railroads, canals and steamboats? a. Free rider problems were reduced. b. Farmers gained larger shares of the selling price of their crops.

c. Consumers paid decreasing shares of the purchase price for transportation and marketing costs.

d. New unsettled areas were profitably cleared and added to the nation’s economic activity.

10. One of the most important reasons for the economic growth of the U.S. in the antebellum period was market unification and falling costs of trade. Samuel F. B. Morse contributed significantly to these trends. Morse is most recognized for: a. Inventing the telegraph. b. Inventing the steam engine. c. Developing the technology to power railroad engines. d. Overseeing the building of the Erie Canal.

Please answer the following short response questions. Please use 2- 4 complete sentences (equations and math, if necessary) for each question (more is okay):

Please show the movements to the following questions (11-14) using a Supply-Demand graph, and then justify your answers as well:

11. A. Increases in productivity due to changes in technological capacity B. Assume tobacco is a normal good; Incomes of New Englanders increase C. Tobacco prices fell dramatically in the early 1600s in spite of demand increases

12. The U.S. terminated its role in the slave trade in the early 1800s. What is the best assessment of what would have happened had the U.S. not ended the slave trade?

13. What would be the impact of a virus that infected the Midwestern corn crop?

14. Describe the impact of the cotton gin.

15. For the following scenarios; 1) Please tell us if this activity produces any externalities, 2) Is the externality positive, negative, or both. a. an iron smelting factory emits sulfur dioxide into the air

b. the owner of a steamboat company dredges a river in order to improve navigation c. a group of investors starts a business specializing in transporting goods via clipper ship d. flatboat operators purchase steamboat tickets in order to return to their homes upstream