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Econ 115: Sample Midterm 1
S 2017
A.
Multiple Choice Quantitative (20 min; 40 points)
1.
(10 pts) In the 70 years from 1800 to 1870, real global GDP doubled. What was the average
growth rate of real global GDP between 1800 and 1870?
a. about 2
%
/year
b. about 1.3
%
/year
c. about 1
%
/year
d. about 0.7
%
/year
e. none of the above
2.
(10 pts) World GDP per worker today is about $32,000/year. If growth up until now had been
steady at 2
%
/year, at what year in the past would living standards have been at subsistence—
i.e., a level of $1,000/year for average worker earnings
a. about 1500
b. about 1500
c. about 1837
d. about 1800
e. none of the above
A quantity growing at 2
%
/year has a doubling time of 36 years. To get from 32,000 back to 1000
requires fi ve undoublings. 36 x 5 = 180. therefore we are talking about 1837…
3. (20 pts) In 2016 the World as a whole produced and used some $25 trillion of manufactured
goods. If the supply curve for manufactured goods has constant-returns-to-scale, with no producer
having (much of) an opportunity cost advantage over any other, and if the demand curve for
manufactured goods is a straight line linear function such that a doubling of the price from its
current value would lead to a reduction in the quantity demanded of 1/5, what are the levels of
consumer (CS) and producer (PS) surplus?:
a. CS = $31.5T, PS = $31T
b. CS = $25T, PS = $0T
c. CS = $62.5T, PS = $0
d. CS = 0, PS = $25T
d. none of the above
Let’s take the current price of manufactured goods to be equal to 1 just for simplicity. Then in
equilibrium in a year today $25T of manufactures are produced and sold at a price of $1. The
supply curve is flat at a price of $1 per unit. It is:
S: P = 1
The demand curve goes through the point ($25T, 1), and has a slope of -1/5—raising the price
from 1 to 2 would reduce demand to $20T. So the demand curve where quantities are measured in
trillions are:
1
D: P = 6 - Q/5
These lines do indeed cross at (1, $25T).
The greatest willingness-to-pay is $6. The lowest opportunity cost is $1. So the fi rst unit produced
and sold produces $5 of surplus. Average surplus is half of that—$2.50 per unit. $25T units are
produced and sold, so surplus is $62.5T. Because the supply curve is flat at a price equal to $1,
there is no PS: all surplus is CS:
B.
Multiple Choice Qualitative (20 min; 40 points; 4 pts each)
1.
True or false: behaviorally-modern humans—people who, when anthropologists look at what
they have left, say, “yes, they look and behave like us”—have been on the earth for less than
100,000 years:
a. True
b. False
2. The four biggest ideas of this course include:
a. extraordinary economic growth, extraordinary growth in economic inequality, and
tyranny
b. extraordinary economic growth, the loss of individual liberty even in the “free world”,
and an inward turn toward spiritual values
c. extraordinary growth in economic inequality, the feminist-demographic revolution, and
the absence of major wars from the century.
d. all of the above
e. none of the above
3. The Amerindian population in the Americas, after European arrival and conquest:
a. crashed to perhaps a tenth of its pre-1492 population under the impact of primarily
plagues, then followed by large-scale violence and exploitation.
b. rapidly recovered from an initial plague-driven decline to higher levels because of the
sudden availability of Eurasian meat animals such as cows and sheep and nutritious plants such as
wheat and rice.
c. expanded in South and Central America, but collapsed in North America
d. expanded in North America, but collapsed in South and Central America
e. none of the above
4. Life during the agrarian age between the discovery of agriculture and the Industrial Revolution
typically involved:
a. a simple life that produced few luxuries but required few average hours of work a day
b. great poverty and a short average lifespan
c. a vast improvement over hunter-gatherer days because of increased productivity
d. all of the above
e. none of the above
5. The speed of and the diffusion across the globe of economic growth underwent a big jump
around 1870 because of the arrival then of :
a. the research lab, the steam engine, and capitalism
b. the research lab, the submarine telegraph, and socialism
d. the iron-hulled steamship, the industrial research lab, and the submarine telegraph
d. all of the above
2
e. none of the above
6. The richest countries today include:
a. The United States
b. Japan
c. Germany
d. all of the above.
e. none of the above
7. Across deep time since 75,000 BC, for most of that time human beings have been:
a. hunter-gatherers
b. agriculturalists
c. herders
d. workers in industrial factories
e. none of the above
8. The coming of Atlantic trade by 1700 was:
a. a decisive factor behind Europe’s industrial revolution after 1700
b. completely irrelevant to Europe’s prosperity in 1700
c. something that made Spain richer—but not Britain
d. something that made Britain richer—but not Spain
e. none of the above
9. The two most populous countries in the world today are:
a. India and Russia
b. China and India
c. India and Nigeria
d. China and Indonesia
e. none of the above
10. The country that has experienced the fastest growth spurt in the twentieth century is:
a. China
b. India
c. the United States
d. Great Britain
e. Russia
C.
Essay (10 min; 20 points)
Recall chapter 3 of Robert Allen’s book
Global Economic History
. In that chapter, Allen
presents his theory about why the essential precondition to 20th century economic history
—the British Industrial Revolution—(a) happened in Britain (and not somewhere else)
and (b) happened in the eighteenth and nineteenth centuries—from 1730 to 1870—(and
not some earlier and later time). Write an essay explaining what Robert Allen’s theory is,
whether you agree or disagree with it, and what major considerations led you to your
agreement or disagreement.
https://www.icloud.com/pages/01W-
QJpoMJNKpn3B6jfQ0xKeg#2017-02-02_Econ_115_S_2017_Sample_Miderm_1
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