Industrialization and the rise of big business begins on page What effect did the transcontinental railroad have on the United States? 2.What is capital? 3.Explain how a corporation works 4.What is a monopoly? What effect does it have on the owner, customers, and other businesses? 5.What is a trust? 6.How did the following make their money? Andrew Carnegie John D Rockefeller JP Morgan Henry Ford 7.Explain Laissez Faire. Why did businesses support this? 8.What is a free enterprise system? 9.How did Social Darwinism justify Laissez Faire economics? 10.Why were entrepreneurs referred to as Robber Barons? What did this lead many of them to do? 11.Why did government support Laissez Faire economics? 12.What were the conflicting decisions of Munn v Illinois and Wabash, St. Louis and Pacific Railway Co. v Illinois? 13.What precedent did the Interstate Commerce Commission set? 14.What was the purpose of the Sherman Antitrust Act?

What effect did the transcontinental railroad have on the United States?

The transcontinental railroad The transcontinental railroad connected the east coast to the west coast. This allowed the opening of new markets in the west, as well as, along the rail route. Products and raw materials needed for production could be moved from west to east, at a much faster rate. However, railroad companies would sometimes charge unfair prices, leading to the need for government regulation.

What is capital?

Capital Money for investment- typically to cover business costs

Explain how a corporation works

Corporation Corporations are companies that raise capital by allowing investors to buy a percentage of a company. This percentage comes in the form of stocks or shares. If the company does well investors earn money, if the company fails, loss is distributed among investors. Corporations are preferred because they protect a single owner from bankruptcy, as well as, providing a means for raising capital.

What is a monopoly? What effect does it have on the owner, customers, and other businesses?

Monopoly A Monopoly is when One business has complete control over an industry. This is an advantage for the company that has the Monopoly because it can charge whatever it wants for it’s good or service. Customers have no choice, but to purchase from monopoly, regardless of the quality. Monopolies also prevent other businesses from succeeding by driving prices down.

What is a trust?

Trust Group of corporations in similar or related fields, run by one board of trustees Board of trustees made decisions for all corporations involved

How did the following make their money? Andrew Carnegie John D Rockefeller JP Morgan Henry Ford

Andrew Carnegie Made money creating steel John D Rockefeller Made money in Oil Refinery Formed Standard Oil Trust JP Morgan Banking and US Steel (bought from Carnegie) Henry Ford Assembly line- mass produced automobiles

Explain Laissez Faire. Why did businesses support this?

Laissez Faire Government has little to no involvement in business Government does not regulate business Many businesses supported Laissez Faire because it allowed them to do whatever was necessary to succeed, without the government interfering and telling them to play fair

What is a free enterprise system?

Free Enterprise Economic system where the market is controlled by privately owned businesses and the decisions they make

How did Social Darwinism justify Laissez Faire economics?

Social Darwinism Survival of the fittest The company that is the most suited to succeed will succeed If government does not get involved, companies will compete, and the best will win

Why were entrepreneurs referred to as Robber Barons? What did this lead many of them to do?

Entrepreneurs were often referred to as Robber Barons because they did whatever was necessary to succeed Low wages High prices Poor quality Unfair business practice Many entrepreneurs became philanthropists donating huge amounts of money to charities and institutions

Why did government support Laissez Faire economics?

Government supported Laissez Faire economics because The economy was growing Foreign trade was growing Many politicians received money from businesses in return for special treatment

What were the conflicting decisions of Munn v Illinois and Wabash, St. Louis and Pacific Railway Co. v Illinois?

Munn v Illinois States could regulate trade where the public was affected Wabash, St. Louis and Pacific Railway Co. v Illinois Only the federal government could regulate interstate trade on the railroads States were powerless to regulate railroads

What precedent did the Interstate Commerce Commission set?

The Interstate Commerce Commission First time that government stepped in to regulated business

What was the purpose of the Sherman Antitrust Act?

Sherman Anti-Trust Act Break up any monopolies or trusts Promote competition in the market Protect consumers