Exam 1 - Spring 2012
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1 Econ European Economic History: The Industrial Revolution John Lovett Exam 1 - Spring 2012 Use a code name to take this exam. Do not use your real name. Do not pick a crude or offensive code name. Do not pick a code name that gives your real name away. Write your real name and your code name on the noc sheet when you leave. Code Name: (0.5 pt) 1
2 Econ European Economic History: The Industrial Revolution John Lovett Part 1: The details (55.5 points. 2.5 pts each unless noted.) 1. What does Wrigley argue caused the Dutch Republic to develop the way it did in the 1700s? a. The Dutch Republic bet on trade with Southeast Asia. The English bet on trade with the Caribbean and India. b. The Dutch Republic responded to its past success by increasing its population to near the biological maximum. c. The Dutch Republic lacked the coal and other natural resources that England had. d. Although the Dutch were very good at finding profitable ways to invest money, they actually provided little in the way of savings and investment. Instead, the Dutch relied of foreign savings. 2. Puerto Pobre s GDP/capita is currently $5,000. What will it be in 20 years if it grows at 2%/year? Show me the formula with the exact numbers needed to find the result. You do not, however, have to solve for the $ amount. 3. $ Xanadu s GDP/capita is currently $7,000. Approximately what will it be in 70 years if it grows at 2.0% per year for 70 years? Use a rule of thumb and give me a $ amount. 4. (2 pts) Over the past few centuries, the gap between rich and poor nations has: a. tended to narrow. b. stayed about the same. The richest 20% of nations have about 5x the GDP/capita of the poorest 20% of nations today. The same was true several centuries ago. a. increased. 5. What, according to Anthony Wrigley (and others), were the main constraints on increases in living standards prior to relatively modern times (prior to the 19th century)? What factor(s) were preventing economies from seeing sustained increases in living standards over time? a. limited understanding of economic theory b. too small of a middle class c. too much harmful competition between European states d. limited land and limited energy e. limited government investment in infrastructure and research 6. Roughly when did the trend growth rate of GDP per capita in many rich nations equal or exceed 1%? a. about 1100 AD (CE) b. about 1400 AD (CE) c. about 1550 AD (CE) d. about 1800 AD (CE) e. about 1900 AD (CE) f. about 1940 AD (CE) 7. Which of the following best defines Diminishing Returns? a. If all inputs are increased by X%, output goes up but by less than X% b. If all inputs are increased by X%, output goes up by X% c. If one input is increased by X%, output goes up but by less than X% d. If one input is increased by X%, output goes up by X% e. If one input is increased by X%, output goes up but by more than X% 2
3 Econ European Economic History: The Industrial Revolution John Lovett 8. What is one of the major ramifications of Diminishing Returns for Economic History? a. Growth of living standards is impossible over the long run. b. Labor will necessarily get smaller and smaller shares of income as an economy develops. For workers to get X% more, output per worker has to increase by more than X%. c. After a certain point, more land per person actually decreases living standards. d. There are limits to growth based on adding resources. For example, adding more capital per worker can increase living standards, but generally only by limited amounts. 9-10: Assume that two countries currently have equal values for real GDP/capita. However, one country s GDP/capita is growing at 2%/year while the other is growing at 3%/year. 9. Which figure best represents GDP for the two countries over the next 10 years? 10. Which figure best represents GDP for the two countries over the next 100 years? $100,000 a. b. $90,000 $80,000 $18,000 $16,000 $70,000 $14,000 $60,000 $50,000 $40,000 $12,000 $10,000 GDP - $8,000 $30,000 $6,000 $4,000 $10,000 GDP - $2,000 0?????????? $200,000 c. d. $180,000 $160,000 $100,000 $90,000 $80,000 0??????????? $140,000 $70,000 $120,000 $100,000 $80,000 $60,000 $50,000 $40,000 $60,000 $30,000. $40,000 GDP - 0??????????? 11. (3 pts) Which of the following are advantages horses have over oxen as draft animals? Check ( ) any and all that apply. Horses can work much longer hours than oxen. Horses can pull faster, therefore allowing them to plow more in a work day. Horses are cheaper to feed and care for. Hay is for Horses. Oats are for Oxen. Members of the opposite sex dig horses. If you are a medieval babe and want to date a medieval dude, show up to his house with a pair of horses. Same thing if you are medieval dude wooing a medieval babe, medieval hermaphrodite wooing, etc. 3 $10,000 GDP - 0??????????
4 12. (6 pts) Assume a purely Malthusian world with a fixed amount of land. Then there is significant, but one-time, innovation. This innovation results in more production for any given level of land, labor, & capital. Complete the graphs showing what happens to: i) GDP/capita & ii) Population. i. GDP/capita Index ii. Population T 1 Here s where the innovation occurs. $0 gen 0 gen 1 gen 2 gen 4 gen 5 gen 6 Time Here s where the innovation occurs. 0 gen 0 gen 1 gen 2 gen 4 gen 5 gen 6 Time 13. From 1000 AD to 1450 AD, technological progress in Europe was: a. was relatively high and steady for human history prior to the Renaissance, Enlightenment, and Industrialization. b. was relatively high and steady even when compared to the modern era. c. almost non-existent. The technology at the end of the period was almost identical to that at the beginning of the period. d. was overall negative. Many arts were forgotten and many advanced techniques fell into disuse over the period. 14. According to Jones and lecture, how might the Vikings have influenced feudalism in Europe? a. Once they adopted Christianity, the Vikings became the main group spreading Christianity to the fringes of Europe. Since Christianity encouraged fair trade between Christian, largely because of the Vikings, much of Europe became a free trade Christian Empire. b. Despite their fierce reputation, the Vikings were the main group that transferred knowledge from the east (Byzantium and the Islamic World) to Europe. The Vikings started Europe s 1 st renaissance that led to Europe soon becoming the most developed part of the world. c. The Viking raids made it hard for large political units to survive. Smaller political units were more defensible. d. Feudalistic societies could not raise the large standing armies needed to confront the Viking raiders. As a result, larger political units, the early nation states, arose. 15. Which of the following best describes feudalism? Feudalism is a system in which: a. the local political units are merely administrative units of the central government. The local political units do not make their own economic or legal policies. b. the people of a region share a common culture, be it based on religion, language, or common social norms. The people, however, are not politically united except sometimes in war. c. peasants are attached to land. The peasants owe the owners of the land labor. If the land is sold, the peasants are sold with it. d. local leaders pledge military service to greater leaders in exchange for more secure & clear title to land 4
5 Below you have some beautiful illustrations of three types of waterwheels (side view and not necessarily to the same scale). 16. (2 pts) Label each of the following types of waterwheels. 17. (2 pts) Indicate which waterwheel type was the earliest in general use (1 st ), the 2nd in general use, and the last to come into general use (3 rd ). 18. (2 pts) Indicate which waterwheel type typically generated the most power on a given stream (1 st ), the 2 nd most power, and the least power (3 rd ). 19. (2 pts) Indicate which waterwheel type usually was the most expensive to produce (1 st t ), the 2nd most expensive, and the least (3 rd ). 16. Name: 17. Earliest in use: 18. Most Power: 19. Highest Cost: 16. Name: 17. In use: 18. Power: 19. Cost: 16. Name: 17. In use: 18. Power: 19. Cost: Indicate which region is likely to, according to Jones, see a faster rate of economic growth in the long run. Assume that the regions are alike except for the differences noted. The first one has been done with you. # Region 1 v Region a lush planet inhabited by a incredibly intelligent, hard working species. has 8 nation states. Each state is about 10,000 miles 2 (100 x 100 miles). has 5 nations. States have not developed systems to prevent financial or physical capital from moving to other nations. has 12 nation states. Each state has strict control that keep labor from leaving the nation. an uninhabited planet with no atmosphere & an avg. temp. of 1,900 F. has 200 nation states. Each state is about 50 miles 2 ( 7.1 x 7.1 miles). has 5 nations. Each state has strict control that keep both financial and physical capital from leaving the nation. has 12 nation states. States have not developed any system to prevent labor from moving to other nations. 5
6 Part 2: (Short Essay) Answer 1 of the 2 following questions on the attached paper. (15 pts) 1. What is modernity (at least according to this course)? Did either the United States and/or United Kingdom achieve modernity by 1770? If so, explain why the U.S. and/or UK, by 1770 achieved modernity. If not, explain, why economists interested in modernity still care about the period (contact to about 1800) up to 1770? 2. What, according to Wrigley, were the main constraints on increases in living standards prior to relatively modern times (prior to the 19 th century)? i.e. What one or two factors of production were preventing economies from seeing sustained increases in living standards over time? Note, this can be answered in just a few words ( ex. and ) but, if this were an actual exam, I d use at least a short paragraph or two. Part 2: (Long Essay) Answer 1 of the 2 following questions on the attached paper. (30 pts) 1. How, prior to relatively modern times, did people and the economy react when living standards increased? How do these reactions (to increases in living standards) affect a society s ability to see sustained increases in living standards? Explain your answer. 2. How, according to Jones (and our lecture), might have differences between the European state system and Asian State system led to different rates of development in Europe and Asia? Explain your answer. 6
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