ECON 2200E Lecture Notes - Lecture 3: Cotton Gin, Fugitive Slaves In The United States, Inferior Good
18 Jan 2017
School
Department
Course
Professor
Document Summary
Income increased and cotton is a normal good (wool is inferior good: price rises and eq to rise, ps: higher (plantations in the south, cs: ? (raw cotton is textile mills) Labor and wage graph: demand for labor is mrpl = mpl (output per worker) x p cotton, revenue each slave produces increases, price increases, thus demand increases, makes south more dependent on slaves. South had low taxes on cotton: look at if tax per unit of cotton falls. Price buyers pay falls, price plantations receive is higher. Transportation costs are falling: steamboat (same as taxes falling above, drives slavery. Expectation that slavery persists: fugitive slave act 1850 , demand for slavery increased. Eli whitney"s cotton gin: sr- sticky price of cotton, lr all things vary, demand for labor = mpl x p cotton. Mp increased a lot, revenue increased per each slavery, so demand increased. For the long run, price for cotton will fully adjust.
