Chapter 3



Chapter 3

Colonial Economic Activities

General Questions

1. All of the following were important colonial industries except:

a. fishing and fish packing.

b. production of ships’ stores.

c. manufacturing of finished iron goods.

d. shipbuilding.

2. Agricultural staples of the colonial South included

a. rice.

b. tobacco.

c. indigo.

d. all of the above.

3. Which was the least prominent crop grown in the colonial United States?

a. tobacco

b. sugar

c. wheat

d. rice

4. In what period did the greatest productivity advances in colonial tobacco production occur?

a. 1492-1525

b. 1610-1630

c. 1680-1700

d. 1750-1775

5. What was not true about the New England colonial economy?

a. It was the leading fishing industry in the colonies.

b. It was a net importer of food.

c. It was the leading colonial shipping industry in the colonies.

d. It was the most productive area in terms of agriculture.

6. What was not true about the economy of the Middle Colonies?

a. It was a net importer of food.

b. The farms were generally smaller than those in the South.

c. The crops did not have large economies of scale.

d. Its main agricultural products were grains.

7. During the colonial period, which region specialized in grain production, primarily using family farms?

a. the Middle colonies

b. the Southern colonies

c. the New England colonies

d. Newfoundland

8. The only mineral that was available in any significant quantity in colonial America was

a. gold.

b. silver.

c. iron.

d. coal.

9. The colonial production of ________ had a high fixed cost because it required an initial heavy investment in capital.

a. tobacco

b. rice

c. indigo

d. cotton

10. The primary reason for the success of the colonial shipbuilding industry was

a. the plentiful supply of skilled labor.

b. low wages in the American shipbuilding industry.

c. a plentiful supply of iron ore.

d. the close proximity of raw materials, especially lumber.

11. The wealthiest occupational groups in North America included

a. merchants in New England.

b. merchants in the Middle colonies.

c. large land-holding planters in the South.

d. all of the above.

12. What was the most fundamental relationship among most Native American tribes, including the Iroquis?

a. Mother-daughter.

b. Husband-wife.

c. Father-son.

d. Chief-warrior.

Economic Insights

1. What was not one of the original reasons for founding the colony of Georgia?

a. to alleviate London of some of its poorer people

b. to establish an agriculturally productive society with the use of slave labor

c. to provide a buffer between the English and Spanish colonies

2. Which colony was the last of the original 13 to be founded and was designed to assist those who owed debts in the Old World?

a. Georgia

b. Rhode Island

c. Florida

d. Pennsylvania

2. In colonial Georgia,

a. communal agriculture was successful.

b. cotton plantations were flourishing by the early 1700s.

c. the slave population assisted free colonists in defending the Florida border.

d. slavery was initially prohibited.

Economic Analysis

1. If a product exhibits decreasing returns to scale, then the average cost of making the product will ______ as a company produces more of it.

a. increase

b. decrease

c. remain the same

d. There is insufficient information provided to answer the question.

2. If a product exhibits increasing returns to scale, then the average cost of making the product will ______ as a company produces more of it.

a. increase

b. decrease

c. remain the same

d. There is insufficient information provided to answer the question.

3. Suppose the only input in agriculture is time and the following chart depicts the time it took for the Middle Colonies and New England to produce barley and milk. Using the principle of comparative advantage, what would be the most efficient solution?

|Time to produce: |New England |Middle Colonies |

|1 ton of barley |4 hours |5 hours |

|1 ton of milk |3 hours |6 hours |

a. New England produces both barley and milk.

b. New England produces barley and the Middle Colonies produce milk.

c. New England produces milk and the Middle Colonies produce barley.

d. There is insufficient information given to determine comparative advantage.

Productivity of Each Area

| |New England |Middle Colonies |

|Amount of barley produced in 1| | |

|hour |1/4 ton |1/5 ton |

|Amount of milk produced in 1 | | |

|hour |1/3 ton |1/6 ton |

To determine comparative advantage, compare the productivities of producing the two goods--one in terms of the other. To produce 1 ton of milk, New England would have to not produce 3/4 tons of barley. The Middle Colonies must give up 6/5 of a ton of barley to produce 1 ton of milk. Therefore, New England has a lower opportunity cost of producing milk and the Middle Colonies have a lower opportunity cost of producing barley. New England should produce milk and trade for barley, while the MC should produce barley and trade for milk.

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