Economics 1740 - Weber State University



Economics 1740 VERSION A - MARK ON YOUR SCANTRON ANSWER SHEET

Fall, 2002

Dr. Alston , Quiz #8, Walton and Rockoff, Chapters 15 & 16

1. Between 1870-1910, quantitative evidence shows very little, if any growth in bushels produced per acre for crops like corn and wheat. Which of the following statements correctly depicts the situation of farmers during this period?

a. Although output per acre was not growing, increased labor productivity allowed farmers to earn profits.

b. Farmers exited corn and wheat production due to lack of profits in these crops.

c. Because output per acre was not growing, farmers were forced to produce corn and wheat on farms of 60 acres or less.

d. Corn and wheat production became concentrated in the Great Lakes region, where small farms were common after the Civil War.

2. Which of the following did not contribute to the farmer’s worsening terms of trade during the period of 1875-1895?

a. a rapid increase in the supply of agricultural products

b. output increases as a result of technological change during the period

c. a rise in demand for U.S. crops after the Civil War

d. the income elasticity of demand for most agricultural crops was less than one

3. The Morrill Act of 1862 established

a. local chapters of the organization that later became known as “Future Farm Leaders of America.”

b. state-run agricultural experiment stations.

c. “land-grant” colleges that provided agricultural education and research.

d. funding for high-school vocational training.

4. According to the text, what best explains the price for federal land that would have maximized real GNP?

a. Some price above zero that maximizes government revenues to be redistributed fairly to the people.

b. Some price above zero that minimizes negative environmental externalities.

c. A price equal to zero that eliminates the welfare loss associated with land not used for production.

d. A subsidized price that distributes land based on egalitarian principles.

5. Increases in the price of farm labor during the postbellum period led to a(n)

a. increase in farmers’ demand for capital equipment.

b. decrease in farmers’ demand for land.

c. decrease in the demand for food.

d. increase in the demand for fertilizer.

6. Albert Fishlow argued that if the railroads were built ahead of demand, we would observe initial profit rates that were very ______ and initial population densities that were very _______.

a. low; high

b. high; low

c. low; low

d. high; high

7. In considering the financial history of the transcontinental railroads, the text argues that there was

a. surprisingly little corruption given the corruption in other walks of life at the time.

b. surprisingly little corruption, mostly involving the buying off of federal regulators when rate controls became unreasonable.

c. a great deal of corruption, mostly in the form of high fees charged immigrants for what was really free federal land.

d. a great deal of corruption, mostly because construction companies were run by insiders.

8. The Grangers would most likely support which policy?

a. price controls on grain operators

b. price deflation

c. a strong commitment to backing currency only with gold

d. federal government aid to railroads

9. Robert Fogel’s estimate of the total benefits of the railroad in the transport of agricultural products, nonagricultural products, and passenger service is _____ percent of GNP in 1890.

a. about 5

b. about 40

c. about 80

d. about 120

10. Cartels

a. encourage competition.

b. attempt to restrict output in order to raise prices.

c. rely on legally enforceable contracts between cartel participants.

d. rely on advertising and packaging to increase profits.

e. all of the above

ANSWERS: Quiz No. 8, Econ 1740 Fall, 2002, Walton and Rockoff, Chapters 15 & 16, Version A

1. ANSWER: a. Although output per acre was not growing, increased labor productivity allowed farmers to earn profits.

2. ANSWER: c. a rise in demand for U.S. crops after the Civil War

3. ANSWER: c. “land-grant” colleges that provided agricultural education and research.

4. ANSWER: c. A price equal to zero that eliminates the welfare loss associated with land not used for production.

5. ANSWER: a. increase in farmers’ demand for capital equipment.

6. ANSWER: c. low; low

7. ANSWER: d. there was a great deal of corruption, mostly because construction companies were run by insiders.

8. ANSWER: a. price controls on grain operators

9. ANSWER: a. about 5

10. ANSWER: b. attempt to restrict output in order to raise prices.

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