Midterm 1 2005

Midterm 1 2005 - Spring 2005 Name: _ [2 points] Principles...

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Name: __________________________ [2 points] 1/6 Principles of Macroeconomics Midterm 1 You’ll have fifty minutes to complete this exam. Be sure to label all your curves, axes, and (where appropriate) intercepts. If you have any questions during the course of the exam, feel free to ask me. Good luck! 1) During his lecture last night in Higley Auditorium, Stanley Engerman talked about the tragic history of slavery in the Americas. While he didn’t talk about slavery within the specific context of the tools we’ve been developing in class, we can still use those tools to better understand the issue A) Sadly, the rationale for importing slaves from Africa was almost entirely economic. European colonial powers wanted to grow sugarcane in the tropical climates of Central America and the Caribbean. However, Europeans had no natural resistance to malaria, so there was a very good chance that they would die if they worked on sugar plantations. This isn’t to say that there was no wage that would entice Europeans to work in this labor market, but that wage would’ve been so high that it wouldn’t have been profitable for the plantation owner to employ European workers. Draw a labor supply and demand diagram for European workers that reflects this information. What, if anything, can we say about the equilibrium wage and level of employment? [12 points]
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Midterm 1 2005 - Spring 2005 Name: _ [2 points] Principles...

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