Andrew Carnegie say in his ‘Gospel of Wealth

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1. What did Andrew Carnegie have to say in his ‘Gospel of Wealth’ essay of 1889? (Gather your information from various areas of the chapter.)

2. How did vertical and horizontal integration differ from one another?

3. Who were the robber barons? What was the alternate way of looking at them? Can you think of any modern corporate figures that might be termed robber barons?

4. What was scientific management?

5. What was remarkable about the Chinese Exclusion Act?

6. What did the Interstate Commerce Act do and why was it passed?

7. For This Question: Consider the differences between the Knights of Labor and the AFL? If one of these models for ‘One Big Union’ were initiated today, which do you think would be more successful and why?

8. What was the Great Railroad Strike of 1877?

Chapter 19

1. What were the four goals of Progressive reformers? – (Slideshare Images 2-9)

2. What was the spoils system and how did it relate to the Pendleton Act?

3. What was the Omaha Platform?

4. Who was Jacob Coxey and why did he have an army?

5. What was the Democrat’s “Solid South” and how did its development affect blacks?

6. Who was W.E.B. DuBois and in thinking about his ideas, do you find him, or Booker T. Washington to be a more compelling advocate for black advancement at this time? (SSI 22)

7. For This Question: Do we need a Progressive Movement now, and could one succeed? What sort of problems would this movement deal with, if you were in charge? Please come up with three things that you think need reforming in the United States at the current time.

8. What was the Wisconsin Idea?

 

Sample Solution

The problem of our age according to Andrew Carnegie is the proper administration of wealth, so that the ties of brotherhood may still bind together the rich and poor in harmonious relationships. The conditions of human life have not only been changed but revolutionized, within the past few hundred years. In former days there was little difference between the dwelling, dress, food, and environment of the chief and those of his retainers. The Indians are today where civilized man then was. When visiting the Sioux, I was led to the wigwam of the chief. It was just like the others in external appearance

y and maximise on savings. Paradoxically, a similar concept in service provision carries a ‘loyalty penalty’ for British consumers, who are losing out on £4bn a year (CMA, 2018). Firms exploit uninformed customers, by discriminating between them. Contrastingly, naïve consumers become complacent and blindly trust their current suppliers, whilst those that may be aware of such practises are deterred away by high search or switching costs.

In an environment where consumers are loyal, hence have an inelastic demand, or are simply uninformed, due to the presence of search costs, firms can choose to employ second and third-degree price discrimination. For example, British Gas offers a range of tariffs dependent on your needs, location etc. for electricity usage.

I illustrate how firms manipulate prices by adopting the Stahl-Varian model. We can change the assumptions from the original model so that the informed customers, I, are new customers, and the uninformed customers, M, are old customers. Thus, the uninformed customers will have a search cost, c, if they look for cheaper service providers. The other assumptions remain the same; all consumers have the same reservation price, r, and there are n symmetric firms in the market.

The number of old (uninformed) customers per firm, U, is exogenously given by:

Firms choose prices between p*, which equals to the marginal cost, and r. Informed customers have knowledge of prices provided by firms, thus, they will only buy from the cheapest firm.

The firm will sell to I with probability:

The firm will sell to M with probability:

Therefore, the firm’s expected profits are given by:

In a competitive market, firms behave in a way to maximise profits. Gamble et al., (2013), suggest firms are cognizant of customer costs; they recognise when customers are likely to switch. In this case, they will lower their price so that the price difference between theirs and rival prices is less than the search and switching costs, thereby stopping customers from switching.

The firm sets prices to maximises profits:

The derivative helps us find the profit maximisation pr

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