How does path dependance explain why I-80 roughly follows the route of the Mormon trail? correct answers It was a popular trail for people heading west and later, the US adopted it as the main highway to the west
How does path dependency explain why employers in the US offer health insurance but...
Econ 1740 exam – 1 || A Verified A+ Pass.
How does path dependance explain why I-80 roughly follows the route of the Mormon trail?
correct answers It was a popular trail for people heading west and later, the US adopted it as the
main highway to the west
How does path dependency explain why employers in the US offer health insurance but not car
insurance? correct answers During WWII the govt imposed prices and wage controls that banned
employers from paying higher wages to attract employees; however, they could add fringe
benefits like health insurance
Why are oil barrels 42 gallons and not some random number correct answers In 1842, king
Edward IV imposed a standard size of barrels at 42 gallons. Later, when oil was discovered, they
used the same barrels while transporting it. They sold it at 40 gallons, but used 42 gallon barrels,
knowing that there would be about 2 gallons of spillage
What are three features that caused the QWERTY keyboard to become locked in? correct
answers 1. Technical interrelatedness - matching the keyboards with typists who learned to type
on that keyboard
2. Economies of sale - cheaper and more adaptable
3 - quasi-irreversibility of investment - adopting machines to the habits of typists
Equation to measure outcome correct answers Q = f(L, M, K)
What are the three inputs in the production function correct answers L = Land
N = Labor
K = Capital
Four ways a country can increase in economic activity correct answers More land, more workers,
more machines, change in technology
Which factors of production were prevalent in pre capitalist Europe correct answers Theirs was
plenty of land and workers but capital or machinery was lacking
How did technological change affect the Roman empire correct answers Their use of currency,
superior transportation systems, and increase in trade within the empire lead to their greatness
Describe Malthus growth theory correct answers Population growth grows faster than food
which leads to poverty and malnutrition and eventually death. Over time, population will
fluctuates but growth will be near zero
Compare and contrast cliometrics with common sense empiricism correct answers Cliometrics is
the application of theory and statistics to historical problems. Common sense empiricism is
relying on anecdotes and observation to study historical questions.
, Why was there very little technological change under feudalist regimes? correct answers Because
feudalism did not reward individual accomplishment so there was little incentive for the people
to work hard and invent new things.
How did mercantilism differ from feudalism? correct answers Merchants were able to trade for
the king but then take home a bit of the profit for themselves. In this way, they were able to
create a better future for themselves and there was more incentive to work hard.
What is a monopoly? correct answers When a single individual or company provides or produces
a good
Pros and Cons of Monopolies correct answers Pro: profits for producers
Con: higher prices to consumers and reduces quantity if the good
Two goals of mercantilism correct answers 1. Achieve a favorable balance of trade that would
bring in gold and silver
2. Maintain domestic employment
How would countries achieve the goals of mercantilism? correct answers 1. Formation of nation
states
2. Establish colonies outside of Europe
3. Increase the number and quality of trade routes
According to planet money, how did the knights templar address the issue of using money for
trade? correct answers They created a bill of exchange. They gave credibility to merchants.
People could take money from one country and buy things with it in another
In capitalism what determines the price that will be charged for a specific good? correct answers
The self interest of the individuals drives the invisible hand. How much the people want the
good.
How was the formation of zcmi an example of socialism? correct answers ZCMI sold shares in
ownership to the workers. So when the company profited, it would directly benefit the workers
What are the three questions that the government answers in communism? correct answers What
is produced?
How is it produced?
Who produces it?
Describe ownership of resources in each economy correct answers Feudalism - the king owns
everything
Mercantilism - the government grants ownership to merchants who then forms a monopoly
Capitalism- private individuals own the resources
Socialism - capitalistic except that the workers own the resources
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