Economics 113: American Economic History: Mock Midterm
A: One-Sentence Identifications (25 points): Briefly state--one sentence--for each of the following people/places/things/concepts its importance for American economic history up through the Civil War. A good strategy is to tie each ID into one or more of the major factors of production: land, labor, capital, technology, and institutions.
Alexander Hamilton, Leland Stanford, Eli Whitney, smallpox, Hernan Cortez, Erie Canal, Northwest Ordinance, Louisiana Purchase, 1808, Mississippi River, American system of manufactures, Missouri-Mississippi-Ohio River system, Royal Proclamation of 1763, corn, sugar islands, cotton gin.
B: One-Paragraph Discussions (25 points): Write one paragraph (three to six sentences) answering each of the following questions:
1) Why did the United States develop differently from Latin America in the colonial period?
2) Why was the United States one of the richest countries in the world at the time of its founding?
3) Why was America a relatively equal country (for white guys) until after the Civil War?
4) British observers before the Civil War wrote back that America was a labor-scarce economy. What difference did they think this scarcity of labor made for American economic development before the Civil War?
5) What was the role of the availability of natural resources as a key factor driving American econonic growth before 1865?
C: Essay: Write an essay on one and only one of the two following topics (25 points):
1) As of the start of the twentieth century, the American economy was almost universally regarded as successful. What were the major aspects of this economic success? Why did they come to pass? Why did so much go so right for the American economy?
2) For those of us who have read a few too many alternate history novels: How would the U.S. economy have been different in 1860 if the U.S. government had followed a zero-tariff policy since 1787?
D: Problem (25 points):
Begin with our growth equation for preindustrial growth in living standards:
g(y) = (1/3)(g(N)-g(L)) + (2/3)g(E)
where g(y) is the growth rate of output per worker, g(N) is the growth rate of available natural resources, g(L) is the growth rate of the labor force, and g(E) is the growth rate of labor efficiency--which in the preindustrial age we fix at 0.9% per year.
1) In preindustrial America up until 1860, the growth rate of natural resources g(N) was 4.2% per year and the rate of growth of the labor force g(L) was 3.0% per year. What was the rate of growth of output per worker g(y)?
2) Suppose that the rate of population growth over any extended period is governed by a semi-Malthusian equation:
g(L) = 2% per year + g(y)
Is this consistent with your answer to (1) above?
3) According to the growth equation and the semi-Malthusian population equation, what would have been the growth rate of output per worker g(y) before the Civil War if the rate of growth of available natural resources g(N) had been zero--if Imperial Britain had remained in control and had, for geopolitical reasons, penned the colonists east of the Appalachians?
4) According to the growth equation and the semi-Malthusian population equation, what would have been the growth rate of the labor force g(L) before the Civil War if the rate of growth of available natural resources g(N) had been zero--if Imperial Britain had remained in control and had, for geopolitical reasons, penned the colonists east of the Appalachians?
5) Explain, in a paragraph or two, how this counterfactual alternate-history "little America" would likely have been different in 1860 than America actually was.