Midterm Review Flashcards

1
Q

What is a path-dependent process?

A
  • the set of decisions one faces for any given circumstance is limited by the decisions one has made in the past, even though past circumstances may no longer be relevant.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Does path dependence necessarily lead to efficient outcomes?

A
  • No.
  • a standard which is first-to-market can become entrenched (like the QWERTY layout in typewriters still used in computer keyboards)
  • inferior standards can persist simply because of the legacy they have built up.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What do equilibria have to do with path dependent processes?

A
  • If there are multiple equilibria, it may indicate path dependence.
  • There is a backward bending supply curve.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Why, according to Jared Diamond, is agriculture bad?

A
  • Few types of food lead to poor nutrition
  • High possibility of crop failure (starvation)
  • Disease can spread in denser populations.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What evidence does Jared Diamond have?

A
  • Bushmen do well, get enough calories
  • Hunter-gatherers (skeletons found in Greece) were very tall (5’9”)
  • Indians (skeletons from Ohio) have more tooth decay once they start cultivating maize
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is the main idea that prompted the Malthusian model?

A
  • Population grows exponentially.
  • Land is fixed.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What happens when there is a technological advance in the Malthusian growth model?

A
  • All of the added income goes to making the population larger, rather than making it richer.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are the axes for a graph of the Malthusian growth model?

A

x-axis = Income

y-axis = birth and death rates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are four environmental factors Jared Diamond gives to account for the disparities between developed and hundeveloped nations?

A
  1. Orientation
  2. Land size (Eurasia vs. the Americas)
  3. Population (# of people)
  4. Isolation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Why were the Indians less developed?

A
  1. There were fewer opportunities to domesticate animals. (less land, fewer different kinds of animals)
  2. Most crops in America could not be domesticated (ditto)
  3. No resistance to disease. (did not live with animals)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is the Pleistocene Overkill?

A

At the end of the last Ice Age, the megafauna were killed off, which gave fewer opportunities to domesticate animals.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the alternative theory to the Pleistocene Overkill?

A

Climate change hypothesis
⁃ drier and warmer
⁃ evidence: small animals died off, too

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

On the eve of the revolution, what did was the ethnic makeup of the U.S.?

A

⁃ 61% = English names
⁃ 8.3% = Scottish names
⁃ 9.7% = Irish names
⁃ 8.7% = German names
⁃ 1.7% = French
⁃ 0.7% = Spanish

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

On the eve of the revolution, what was the wealth per capita?

A

Adjusted for taxes, the American colonists were some of the richest people in the world.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What were American birth and death rates?

A

⁃ Birth Rates much greater
⁃ 3% population growth/yr

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

How did the institutional structure of early American colonies have both the free rider and tragedy of the commons?

A
  • Plymouth Colony did not have land ownership
  • no private property
  • It was centrally owned, and each worked according to his abilities
  • ⁃ share labor’s effort
  • ⁃ Free rider problem
  • ⁃ have to share it with everyone in the group
  • ⁃ shirking
  • ⁃ problems for group cohesion
  • ⁃ Tragedy of the commons
  • ⁃ not take care of land
  • ⁃ disincentive for capital investment
  • ⁃ not ideal
    *
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the three voluntary ways to get to the colonies? What are two involuntary ways?

A

_ Voluntary_
⁃ Indentured Servants
⁃ Pay own way
⁃ Redemptioners
_ ⁃ Involuntary_
⁃ Prisoners
⁃ Slaves

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What was indentured servitude? What is are characteristic that could shorten your contract? In what state would your contract be longer?

A

They were the college loans of its day – your shipping costs would be paid if you agreed to work for a certain amount of time.
23. Average length of contract
⁃ Female < 18 = -2
⁃ Literate = -1
⁃ Farmer = -4
⁃ Metalworker = -4
⁃ Textile = -4
⁃ Antigua = -5
⁃ Maryland = +5

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Why did transportation costs fall during the colonial era?

A
  • Better organization
  • (Lack of?) Pirates

– Exports and related services accounted for 1/6 of colonial income.
4. Productivity increases 0.6 to 1.2% each year
⁃ Average .8% a year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

How did pirate consitutions represent an efficient response to the unique circumstances of the piratical life?

A
  • _ Pirate Resources_
  • capital - Ship (tended to be stolen; owned by all the pirates)
  • capital - Weapons
  • labor - Pirates
  • Pirate Problems
  • ⁃ Keep pirates in check
  • ⁃ Leadership in battle
  • ⁃ Divide booty
  • ⁃ Victuals
  • ⁃ No (real) government

Democracy with written constitutions.
⁃ Each pirate gets one vote.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What incentives did pirate governance have to prevent shirking?

A

Because of the free rider problem, there was a bonus structure for valor in battle and social insurance (worker’s comp) and punishment for failing to adhere to rules.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Why would pirates who preferred peace have an incentive to engage in extreme brutatlity?

A

If they had a reputation of being brutal and insane, the Jolly Roger could signal that resistance was futile, and they would not have to fight again.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is mercantilism?

A

It was an attempt by countries to achieve a more favorable balance of trade. Exports should be greater than imports, and money = power. It was not a set economic theory and espoused a zero-sum game.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

How did mercantilism influence British policy towards the Colonies?

A

England’s Colonies were created largely to fulfill mercantilistic goal of domestic sources of imported goods. Virginia is on the same line of latitude of India?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

How did the fur trade influence American economic growth? How many fur hats were exported between 1700 and 1770 from England?

A
  • Source of wealth
    • John Jacob Astor
    • American Fur Company
  • Shows the role of fashion and custom in economic development
  • 21 million exported in this 70-yr span
26
Q

How did the fur trade relate to mercantilism?

A
  • The rise of American fur in part stemmed from British desire to stop importing them from Russia and the Scandinavian countries.
27
Q

What is the connection between the fur trade, rising fur prices, and the depletion of the beaver?

A
  • Rising prices led to more exploitation of beavers.
  • Evidence: Areas which offered the highest prices for beaver skins were the areas where beavers depleted most.
  • Indians responded to market incentives.
28
Q

How might property rights play a role in the depletion of beavers and rising fur prices?

A
  • The beavers were somewhat of a common resource.
  • While the Indians DID have property rights, they were for a subsistence age, not a market production age.
  • Other people were allowed to hunt ONE time.
29
Q

How does Fogel define the concept of social savings?

A

It is the difference between the cost of transporting goods from the primary to secondary markets without using rail and using rail (and a combination of other transportation).

30
Q

What steps does Fogel take to estimate the social savings for interregional trade?

A
  1. amt of each commodity shipped from each primary market
  2. amt received by each secondary market
  3. Routes over which they were shipped
  4. Transportation costs of medium
31
Q

What type of data does Fogel use?

A
  1. Reports on the inventories of farmers from 1890 and 1891
  2. Commerce and Navigation reports from the Treasury
  3. State investigations into rebating
  4. Quantity of C0W-B0P (corn, wheat, beef, pork)
32
Q

How does the concept of counterfactual play into his analysis of intraregional trade?

A
  1. INTRA = from farm to distribution center.
  2. At first, calculated 337 mil SS.
  3. BUT railroads altered the geography – down to 248 mil after reducing gains.
  4. BUT canals could have determined where farms were. Down to 175 mil SS.
33
Q

What evidence do prices provide for increasing integration of different regions?

A

Before integration, it would take longer for prices to drop.

  • Cincinnati to NYC
  • 1800 = 1 year
  • 1830 = 4 mo
  • 1850 = 1 week
34
Q

Why did transportation productivity increase during the colonial era?

A
  • Got rid of pirates
  • Better organization
  • Less time in port
  • More trips per year
  • Industries emerge to coordinate shipping
35
Q

Who were Redemptioners?

A

They borrowed money and supplies from the ship captain, and paid him back days / weeks after arrival.

36
Q

What was the predominant form of economic activity in New England?

A

Because it had rocky soil, the predominant economic activity was subsistence farming of corn, sheep, and cattle. Further, there were many extractive industries – for example, in furs, skins, timber, cod, lobster, and whales.

37
Q

What was the predominant form of economic activity in the Middle Colonies?

A

In the western part, extractive timber cutting was predominant, using medieval techniques. The eastern part was more modern, and farmed wheat, corn, oats, and barley.

38
Q

What was the predominant form of economic activity in the South?

A

Agriculture. They grew staples for export, for example, tobacco, rice, and indigo.

39
Q

How were people transported to the English Colonies?

A

Some voluntary ways were indentured servitude, pay own way, and Redemptionism. Prisoners and slaves were also transported.

40
Q

What are the axes for a graph showing shift from IS to slavery?

A

Y = wage rate

X = quantity of labor

41
Q

What does S(cig) mean?

A

Supply, after accounting for costs of insurance and freight

42
Q

What does S(fob) stand for?

A

Supply, free on board (that is, not including transportation costs)

43
Q

What are the axes for a graph of the effects of the Navigation Acts?

A

Y= price

X = quantity

44
Q

What was the income of colonial Americans?

A

About 7,250 to 3,875 per capita income in colonies

i.e., some of the richest people in the world

45
Q

What adjustments does Fogel make to his social savings model (to benefit of RR)

A

Adjusts for speed, seasonal restrictions, safety/insurance

Specifically, cargo losses, lower inventories, simplified handling

46
Q

Which author wrote about indians and beavers?

A

Carlos and Lewis

47
Q
A
48
Q

Which author wrote about indentured servitude?

A

Galenson

49
Q

Which author wrote about the economics of revolution?

A

Joseph Reid

50
Q

Which author wrote about pirates?

A

Leeson

51
Q

Who wrote “Farewell to Alms”?

A

Clark

52
Q

What was a benefit to being a Redemptioner? Costs?

A
  • Benefit = choose your own location
  • Cost = super-high implicit interest (maybe 40%) since there was a 10% chance of default
53
Q

What was a headright grant?

A

A person gets 50 acres if they pay their own way.

And for their slaves, too.

54
Q

What were Southern staples for export?

A

tobacco, rice, indigo

55
Q

When were the Navigation Acts passed?

A

1660 and 1663

56
Q

When was the Golden Age of Piracy?

A

1690-1730

57
Q

Why might someone decide to become a pirate?

A
  • Marginal benefit > Marginal cost
  1. Risks
  2. Control over destiny
  3. Probably more money
  4. No abuse by captains
58
Q
A
59
Q

What is a counterfactual?

A

looking at the world as though something else had occurred

60
Q
A