Be sure to review economic terms/theories, such as: economies of scale, productivity, value
added, total fixed cost, monopoly, elasticity, deflation, excess capacity, etc.
1. Use Tables 17.1 and 17.2 to describe late-19
century growth in both the labor force and
output across various sectors of the economy. In which sectors was productivity growth
Table 17.1 Shows that between 1860 and 1910, the total labor force grew by 3.4 times. RR
employment was 23.2 times higher in 1910, and the labor force of most manufacturing sectors
grew by 6 times or higher.
Table 17.2 shows that output was expanding, as well as the labor force. RR passenger miles
increased by 17 times and RR freight-ton-miles increased 98 times over. Total manufacturing
product output grew 10.8 times over, and most of the period’s large growth was centered on
The Strongest productivity growth were in railroads, iron and steel.
2. What is “valued added?” Use Table 17.5 to describe changes in value added per worker
in the reunification period. Why does value added per worker tend to be higher in capital-
intensive, “high-tech” industries? Use examples from Table 17.5 to illustrate your answer.
VA=Total value of output-material cost.
The industry listed in Table 17.5 with the most rapid advance per worker is men’s clothing.
During the Civil War, mechanization of men’s clothing increased rapidly as standardized sizes
were derived from measurements taken by the army for soldiers’ uniforms.
The boot and shoe industry, the second fastest growing in terms of value added per worker, was
also markedly changed by invention and product-standardizing innovation.
Table 17.5 shows the effects of new technologies, economies of mass scale production, and other
sources of advances in labor productivity
3. Use examples from Table 17.3 to show how changes in the major U.S. industries (ranked
by value added) mirrored changes in the US economy and society. How did the #1-ranked
good change between 1860 and 1910? What goods were on the list of top industries in 1860,
but no longer included in 1910? What new industries were added to the list in 1910? Use the
concept of income elasticity to explain the declining position of goods like flour and woolen
goods and the increasing position of goods like malt liquors and tobacco.
Four new industries—printing and publishing, malt liquor, tobacco, and RR cars—made the top
10 list in 1910 whereas flour and meal, woolens, wagons and buggies, and leather goods had
slipped into lower positions. The low income elasticity of demand for flour products and
woolens, plus new technologies and other sources of productivity advance, explain much of this