Midterm Review Flashcards
What is a path-dependent process?
- the set of decisions one faces for any given circumstance is limited by the decisions one has made in the past, even though past circumstances may no longer be relevant.
Does path dependence necessarily lead to efficient outcomes?
- No.
- a standard which is first-to-market can become entrenched (like the QWERTY layout in typewriters still used in computer keyboards)
- inferior standards can persist simply because of the legacy they have built up.
What do equilibria have to do with path dependent processes?
- If there are multiple equilibria, it may indicate path dependence.
- There is a backward bending supply curve.
Why, according to Jared Diamond, is agriculture bad?
- Few types of food lead to poor nutrition
- High possibility of crop failure (starvation)
- Disease can spread in denser populations.
What evidence does Jared Diamond have?
- Bushmen do well, get enough calories
- Hunter-gatherers (skeletons found in Greece) were very tall (5’9”)
- Indians (skeletons from Ohio) have more tooth decay once they start cultivating maize
What is the main idea that prompted the Malthusian model?
- Population grows exponentially.
- Land is fixed.
What happens when there is a technological advance in the Malthusian growth model?
- All of the added income goes to making the population larger, rather than making it richer.
What are the axes for a graph of the Malthusian growth model?
x-axis = Income
y-axis = birth and death rates
What are four environmental factors Jared Diamond gives to account for the disparities between developed and hundeveloped nations?
- Orientation
- Land size (Eurasia vs. the Americas)
- Population (# of people)
- Isolation
Why were the Indians less developed?
- There were fewer opportunities to domesticate animals. (less land, fewer different kinds of animals)
- Most crops in America could not be domesticated (ditto)
- No resistance to disease. (did not live with animals)
What is the Pleistocene Overkill?
At the end of the last Ice Age, the megafauna were killed off, which gave fewer opportunities to domesticate animals.
What is the alternative theory to the Pleistocene Overkill?
Climate change hypothesis
⁃ drier and warmer
⁃ evidence: small animals died off, too
On the eve of the revolution, what did was the ethnic makeup of the U.S.?
⁃ 61% = English names
⁃ 8.3% = Scottish names
⁃ 9.7% = Irish names
⁃ 8.7% = German names
⁃ 1.7% = French
⁃ 0.7% = Spanish
On the eve of the revolution, what was the wealth per capita?
Adjusted for taxes, the American colonists were some of the richest people in the world.
What were American birth and death rates?
⁃ Birth Rates much greater
⁃ 3% population growth/yr
How did the institutional structure of early American colonies have both the free rider and tragedy of the commons?
- Plymouth Colony did not have land ownership
- no private property
- It was centrally owned, and each worked according to his abilities
- ⁃ share labor’s effort
- ⁃ Free rider problem
- ⁃ have to share it with everyone in the group
- ⁃ shirking
- ⁃ problems for group cohesion
- ⁃ Tragedy of the commons
- ⁃ not take care of land
- ⁃ disincentive for capital investment
- ⁃ not ideal
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What are the three voluntary ways to get to the colonies? What are two involuntary ways?
_ Voluntary_
⁃ Indentured Servants
⁃ Pay own way
⁃ Redemptioners
_ ⁃ Involuntary_
⁃ Prisoners
⁃ Slaves
What was indentured servitude? What is are characteristic that could shorten your contract? In what state would your contract be longer?
They were the college loans of its day – your shipping costs would be paid if you agreed to work for a certain amount of time.
23. Average length of contract
⁃ Female < 18 = -2
⁃ Literate = -1
⁃ Farmer = -4
⁃ Metalworker = -4
⁃ Textile = -4
⁃ Antigua = -5
⁃ Maryland = +5
Why did transportation costs fall during the colonial era?
- Better organization
- (Lack of?) Pirates
– Exports and related services accounted for 1/6 of colonial income.
4. Productivity increases 0.6 to 1.2% each year
⁃ Average .8% a year
How did pirate consitutions represent an efficient response to the unique circumstances of the piratical life?
- _ Pirate Resources_
- capital - Ship (tended to be stolen; owned by all the pirates)
- capital - Weapons
- labor - Pirates
- Pirate Problems
- ⁃ Keep pirates in check
- ⁃ Leadership in battle
- ⁃ Divide booty
- ⁃ Victuals
- ⁃ No (real) government
Democracy with written constitutions.
⁃ Each pirate gets one vote.
What incentives did pirate governance have to prevent shirking?
Because of the free rider problem, there was a bonus structure for valor in battle and social insurance (worker’s comp) and punishment for failing to adhere to rules.
Why would pirates who preferred peace have an incentive to engage in extreme brutatlity?
If they had a reputation of being brutal and insane, the Jolly Roger could signal that resistance was futile, and they would not have to fight again.
What is mercantilism?
It was an attempt by countries to achieve a more favorable balance of trade. Exports should be greater than imports, and money = power. It was not a set economic theory and espoused a zero-sum game.
How did mercantilism influence British policy towards the Colonies?
England’s Colonies were created largely to fulfill mercantilistic goal of domestic sources of imported goods. Virginia is on the same line of latitude of India?
