Question 1

Robert Fogel's estimate of the total benefits of the railroad in the transport of agricultural products,nonagricultural products,and passenger service is _____ percent of GNP in 1890.

Accepted Answer

A)  about 5
B)  about 40
C)  about 80
D)  about 120 D

Question 2

The Grangers would most likely support which policy?

Accepted Answer

A)  Price controls on grain operators
B)  Price deflation
C)  A strong commitment to backing currency only with gold
D)  Federal government aid to railroads A

Question 3

Widespread assumptions about the first transatlantic railroad did NOT include

Accepted Answer

A)  that government support was as essential.
B)  that profits to the nation would be enormous.
C)  that private investors would be easily compensated for any risk.
D)  that transatlantic crossing via rail would take a fraction of the time of a clipper ship passage. C

Question 4

Railroad construction in the late 19th century

Accepted Answer

A)  added little to economic fluctuations.
B)  strongly influence capital formation.
C)  caused the three major financial crisis of that era.
D)  All of the above are correct.
E)   Only b and c are correct.

Question 5

The Willie and Martin Companies were

Accepted Answer

A)  two groups of Mormon "handcarters" who were stranded when early winter storms interrupted their migration.
B)  two work teams that were instrumental in completing the first transcontinental railroad.
C)  the northern and southern branches,respectively,of the Granger organization.
D)  two railroad construction companies that were found to have "insiders" on the boards of railroad companies with which they contracted.

Question 6

Gains in railroad productivity were caused by

Accepted Answer

A)  more powerful locomotives.
B)  automatic couplers.
C)  air brakes.
D)  All of the above are correct.
E)   Only a and b are correct.

Question 7

Types of price discrimination practiced by post-bellum railroads included all of the following except:

Accepted Answer

A)  varied rates based on passenger's gender.
B)  varied rates based on town of origin.
C)  higher rates per mile for short-hauls than for long-hauls.
D)  higher rates per ton for manufactured goods than for raw materials.

Question 8

Which of the following was not used to subsidize railroad companies and their building of railroads?

Accepted Answer

A)  Loans from the U.S.government
B)  Reduced corporate income taxes
C)  Land grants
D)  Direct payments based on the number of miles of tracks laid

Question 9

The first independent federal regulatory agency was

Accepted Answer

A)  Interstate Commerce Commission.
B)  Federal Trade Commission.
C)  Federal Bureau of Alcohol,Tobacco,and Fire Arms.
D)  United States Fair Trade Commission.

Question 10

Albro Martin and the text contend that the work of the Interstate Commerce Commission was largely for the benefit of _________.

Accepted Answer

A)  consumers.
B)  the environment.
C)  the federal government.
D)  major shippers.

Question 11

In considering the financial history of the transcontinental railroads,the text argues that

Accepted Answer

A)  there was surprisingly little corruption given the corruption in other walks of life at the time.
B)  there was surprisingly little corruption,mostly involving the buying off of federal regulators when rate controls became unreasonable.
C)  there was a great deal of corruption,mostly in the form of high fees chargedImmigrants for what was really free federal land.
D)  there was a great deal of corruption,mostly because construction companies were run by insiders.

Question 12

The Grangers were:

Accepted Answer

A)  an organization designed to support the interests of railroads.
B)  an agrarian society.
C)  an abolitionist organization.
D)  a society that petitioned for Prohibition.

Question 13

In defining the ____ from the railroad,economic historians measure the extra real GNP that can be attributed to this innovation.

Accepted Answer

A)  profits
B)  social savings
C)  wage income
D)  balance of trade

Question 14

After computing the social savings from the railroads,Fogel concluded that ______.

Accepted Answer

A)  the railroads were indispensable to the economic development of the United States.
B)  the railroads were not indispensable in 1850 but by 1890 were dispensable.
C)  the railroads could explain only a small fraction of the growth in real income in the United States.
D)  economics is not sufficiently scientific to make a meaningful calculation of the social savings.

Question 15

Cartels

Accepted Answer

A)  encourage competition.
B)  attempt to restrict output in order to raise prices.
C)  rely on legally enforceable contracts between cartel participants.
D)  rely on advertising and packaging to increase profits.
E)  All of the above.

Question 16

From 1860 to 1910,miles of railroad track in operation increased from roughly ____ miles to _____ miles.

Accepted Answer

A)  1,000;75,000
B)  10,000;50,000
C)  30,000;250,000
D)  75,000;500,000

Question 17

The joining of the eastern and western sections of nation's first transcontinental railroad was commemorated with the driving of the last spike on May 10,1869

Accepted Answer

A)  in Salt Lake City.
B)  in Washington,D.C.
C)  at Promontory Point.
D)  on the rim of the Grand Canyon.

Question 18

In Munn v.Illinois (1877),the Supreme Court held that

Accepted Answer

A)  state laws limiting prices charged by grain elevators were a violation of the Fifth Amendment.
B)  grain elevator and freight prices could only be regulated by the federal government.
C)  states have a right to regulate businesses within the state that are "clothed with a public interest."
D)  organizations like the Grangers violated federal conspiracy laws.

Question 19

Economic theory predicts that a profit maximizing car rental agency with some market power would set its prices in what way?

Accepted Answer

A)  Charge the same for both weekday and weekend rentals.
B)  Charge more for weekend rentals and less for weekday rentals.
C)  Charge more for rentals during the week and less for weekend rentals.

Question 20

In the Wabash case (1886),the Supreme Court held that

Accepted Answer

A)  states cannot enact laws that interfere with interstate commerce.
B)  states could restrict price-discrimination based on person,but not price-discrimination based on place.
C)  states could regulate railroad rates on long-hauls,but not rates on short-hauls.
D)  held that railroad practices could not be regulated by any federal or state governing body.

Exam 16: Railroads and Economic Change