Test bank for Microeconomics 2nd Edition Goolsbee Levitt

Syverson 1464187029 9781464187025

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1. To test whether the law of demand holds using calculus, you should:
D
A) take the partial derivative of quantity demanded Q with respect to P and conclude

that the law of demand holds if this derivative is positive at the market price.
D
B) take the partial derivative of quantity demanded Q with respect to P and conclude
that the law of demand holds if this derivative is negative at the market price.
D
C) take the derivative of P with respect to quantity demanded Q and conclude
that the law of demand holds if this derivative is positive at the market price.
D
D) take the derivative of P with respect to quantity demanded Q and conclude
that the law of demand holds if this derivative is negative at the market price.

2. Suppose that the market demand curve for sunflowers is a function of the price of
sunflowers, the price of roses, and income. If the partial derivative of quantity
demanded of sunflowers with respect to the price of roses is negative, sunflowers
and roses are:
A) substitutes.
B) complements.
C) normal goods.
D) inferior goods.

3. Suppose that the market demand curve for sunflowers is a function of the price of
sunflowers, the price of roses, and income. If the partial derivative of quantity
demanded of sunflowers with respect to income is negative:
A) sunflowers are normal goods.
B) roses are normal goods.
C) sunflowers are inferior goods.
D) roses are inferior goods.

4. Suppose that the market demand curve for cauliflower is a function of the price of
cauliflower, the price of broccoli, and income. If the partial derivative of quantity
demanded of cauliflower with respect to the price of broccoli is positive,
cauliflower and broccoli are:
A) substitutes.
B) complements.
 C) normal goods.
D) inferior goods.

5. Suppose that watermelon, with price PW, and barbecue sauce are related goods. The
expanded demand curve for barbecue sauce, then, is . Suppose
that PW is $5 per watermelon. Use calculus to determine whether watermelon is
complementary or a substitute for barbecue sauce.

Page 1
 6. Suppose that the market demand curve for cauliflower is a function of the price of
cauliflower, the price of broccoli, and income. If the partial derivative of quantity
demanded of cauliflower with respect to income is positive:
A) neither cauliflower nor broccoli is a normal good.
B) cauliflower and broccoli are both normal goods.
C) broccoli is a normal good.
D) cauliflower is a normal good.

7. Suppose that the extended market demand curve for maple syrup can be expressed as
, where Pp is the price of pancake batter and I is
income.
a. Use calculus to argue whether pancake batter is a substitute or complement to maple
syrup.
b. Use calculus to argue whether maple syrup is a normal or an inferior good.

8. Suppose that the market demand and supply curves for chocolate ice cream are
represented by the following equations:
D
Q S = 10,000 – 50P
D
Q = –200 + 40P
S

where Q is the quantity demanded, Q is the quantity supplied, and P is the price.

b. Show that the law of supply holds using calculus.

9. Suppose that the market demand and supply curves for granola bars are represented by
the following equations:
D
Q = 7,000 – 120P
S
D
Q = –50 + 20P
S

where Q is the quantity demanded, Q is the quantity supplied, and P is the price.

b. Show that the law of supply holds using calculus.

10. Suppose that the extended supply curve for children's books can be expressed as
, where Pp is the price of colored paper. Using calculus,
determine whether quantity supplied of children's books increases or decreases as
the price of colored paper increases.

Page 2
11. To test whether the law of supply holds using calculus, you should:
S
A) take the partial derivative of quantity supplied Q with respect to P and conclude

that the law of supply holds if this derivative is positive at the market price.
S
B) take the partial derivative of quantity supplied Q with respect to P and conclude
that the law of supply holds if this derivative is negative at the market price.
S
C) take the derivative of P with respect to quantity supplied Q and conclude that
the law of supply holds if this derivative is positive at the market price.
S
D) take the derivative of P with respect to quantity supplied Q and conclude that
the law of supply holds if this derivative is negative at the market price.

12. In the standard model, we expect the partial derivative of quantity supplied
with respect to input price to be:
A) positive.
B) negative.
C) either positive or negative.
D) The correct answer is uncertain without more information.
D = 1,000 – P
13. Suppose the demand for fabric softener can be described as Q
D
+0.01I, where Q is the quantity of fabric softener demanded, P is the price of
fabric softener, and I is income. Suppose that income is initially 1,000, but it falls
to 800. The new equation for the demand for fabric softener is:
A) 800 – P + 0.01I, and demand has shifted to the left.
B) 800 – P + 0.01I, and demand has shifted to the right.
C) 1,080 – P and, demand has shifted to the left.
D) 1,080 – P and, demand has shifted to the right.
D
14. Suppose the demand for fabric softener can be described as Q = 800 – P – PD, where
D
Q is the quantity of fabric softener demanded, P is the price of fabric softener, and PD is
the price of laundry detergent. Suppose that the price of detergent is initially 10 but
increases to 15. The new equation for the demand of fabric softener is:
A) 785 – P, and demand has shifted to the left.
B) 785 – P, and demand has shifted to the right.
C) 815 – P, and demand has shifted to the left.
D) 815 – P, and demand has shifted to the right.

15. Suppose that the inverse demand curve for energy drinks can be expressed
as . The price elasticity of demand at a quantity of 25 is:
A) –0.5.
B) 0.5.
C) –2.
D) 2.
Page 3
16. For an elastic demand function, the derivative of the revenue function with respect
to price is:
A) positive.
B) negative.
C) zero.
D) infinite.

17. Suppose the demand for baby shoes in a small town is described by the following
equation:
Q=50–2P
where Q is the quantity of baby shoes demanded and P is the average price of a pair of
baby shoes.
a. What is the price elasticity of demand for baby shoes when the price is $15? Use
calculus to show the answer.
b. What is the price elasticity of demand for baby shoes when the price is $10? Use
calculus to show the answer.

18. Suppose that the inverse demand curve for a well-known sports car can be expressed as
, where price is in dollars and quantity is in numbers of cars.
a. What is the price elasticity of demand at a quantity of 100?
b. Is the demand for these sports cars elastic or inelastic?

19. Suppose that the inverse demand curve for a new laptop computer can be expressed as
, where price is in dollars and quantity is in number of laptops.
a. What is the price elasticity of demand at a quantity of 625?
b. Is the demand for these laptops elastic or inelastic?

D
20. Suppose that the demand curve for a new product can be expressed as Q = 900
– 3P. At what price and quantity is total expenditure maximized?
D
21. Suppose that the demand curve for scissors can be expressed as Q = 600 – 0.5P.
At what price and quantity is total expenditure maximized?

Page 4
Answer Key
1. B
2. B
3. C
4. A
5. Since the partial derivative of quantity demanded of barbecue sauce with respect to the

price of watermelon , watermelon is a

complement to barbecue sauce.
6. D
7.
a. Since , pancake batter is a substitute to maple syrup.

b. Since , maple syrup is a normal good.

8. a. Using the derivative of a constant and power rules of

derivatives, . Since this is less than zero,

the law of demand holds.
b. Using the derivative of a constant and power rules of

derivatives, . Since this is more than zero, the

law of supply holds.
9. a. Using the derivative of a constant and power rules of derivatives,

. Since this is less than zero, the law of

demand holds.
b. Using the derivative of a constant and power rules of
derivatives, . Since this is more than zero, the
law of supply holds.
10.

Since , we know that the quantity supplied of children's books

decreases as the price of colored paper increases, which is the expected relationship
given that colored paper is a likely input to production of children's books.
11. A
12. B
13. C
14. A
15. C
16. B
17. a. At $15, quantity is 50 – 2(15) = 20. The derivative of a constant and power rules of
derivatives show that

Page 5
 The price elasticity of demand is .
b. At a price of $10, quantity is 50 – 2(10) = 30. The price elasticity of demand at this

18. price is .
a. First, for a quantity of 100 cars, , and therefore
this sports car costs $80,000. The formula for the price elasticity of demand, written in

terms of calculus, is . With the inverse demand curve equation

as given, we can see that . At a quantity of 100 sports

cars, this value is . Making the appropriate substitutions, we find

that .
19. b. Since this is greater than one in absolute value, these sports cars are price elastic.
a. For a quantity of 625 laptops, 5. The price

elasticity of demand formula, written in terms of calculus, is .

With the inverse demand curve equation as given, we can see that

. At a quantity of 625 laptops, this value

is . Making the appropriate substitutions, we find that

.
b. Since this is greater than one in absolute value, these laptop computers are price
elastic.
20. Total expenditure is maximized when the price elasticity of demand is exactly
unit elastic. This is true when:

D
Rearranging, we can see that this holds when 3P = Q . Substituting into the
demand equation, we get:

21. Total expenditure is maximized when the price elasticity of demand is exactly
unit elastic. This is true when:

D
Rearranging, we can see that this holds where 0.5P = Q . Substituting into the

Page 6
demand equation, we get:

Page 7
1. Which of the following is a key assumption of the supply and demand model?
A) that the price and quantity sold are determined in a single market
B) that the prices and quantities sold are simultaneously determined in all markets
C) the way the whole economy achieves equilibrium
D) that international markets affect domestic markets, which in turn affect local
markets

2. A key assumption of the supply and demand model is that:

A) each firm's good is unique and cannot be duplicated by other firms in the market.
B) firms will continue to raise price until profits become positive.
C) each firm in the market produces an identical good.
D) each firm produces at a level of output at which price exceeds marginal cost.

3. One assumption of the supply and demand model is that:

A) several large sellers can raise prices by restricting output.
B) buyers with bargaining power are able to receive quantity discounts.
C) all of the goods in the market sell for the same price.
D) larger firms sell their products at lower prices than smaller firms.

4. Which of the following is not an assumption underlying the supply and demand model?
A) The focus is on supply and demand in a single market.
B) All goods sold in the market are identical.
C) Different firms sell their goods at different prices.
D) There are many producers and consumers in the market.

5. In the supply and demand model, we assume that there are buyers and
sellers in the market.
A) many; many
B) several; several
C) many; several
D) several; many

Page 1
6. Which of the following factors influences demand?

I. consumer income
II. prices of complement goods
III. prices of substitute goods
IV. the number of consumers
A) I and IV
B) II and III
C) I, III, and IV
D) I, II, III, and IV

7. Electric guitars and amplifiers are complement goods, and electric guitars and acoustic
guitars are substitute goods. An increase in the price of amplifiers the number of
electric guitars consumers want to buy, while an increase in the price of acoustic guitars
the number of electric guitars consumers want to buy.
A) increases; decreases
B) decreases; increases
C) decreases; decreases
D) increases; increases

8. Which of the following statements is TRUE?

A) A demand curve shows the relationship between a product's price and the
number of units consumers want to buy at each price, assuming there are no
changes in other factors affecting demand.
B) A demand curve shows the relationship between consumer income and the quantity
purchased of some product.
C) A demand curve shows the relationship among consumer income, price of a
product, quantity supplied, and the number of units of that product consumers want
to buy.
D) A demand curve is drawn with the assumption that demand equals supply.

9. If the demand curve is QD = 10 - 2P, then the lowest price at which no

consumer is willing to buy the good (i.e., the demand choke price) is:
A) 10.
B) 2.
C) 7.
D) 5.

Page 2
 10. The demand curve for a good is Q = 80 – 0.20P, where Q is the quantity demanded and
P is the price per unit. This good's inverse demand curve is:
A) P = 80 – 0.20Q.
B) P=40–Q.
C) P=5Q+40.
D) P=400–5Q.

Use the following to answer questions 11-12:

Figure 2.1

11. (Figure 2.1) Mathematically, the demand curve D1 is described by this equation:
A) Q=0.75–P.
B) Q = 6 – 0.75P.
C) Q = 8 – 1.33P.
D) P=6–8P.

12. (Figure 2.1) A salmonella outbreak would shift the demand curve for turkey from D1 to
, and a discovery that eating turkey reduces muscle fatigue in athletes would
shift the demand curve for turkey from D1 to _.
A) D2; D3
B) D3; D2
C) D3; D3
D) D2; D2

Page 3
13. Which of the following will not cause demand for apples to increase or decrease?
A) a reduction in the price of apples.
B) a reduction in the price of a complement for apples.
C) an increase in income.
D) a decrease in the number of consumers in the market.

14. Which of the following statements is TRUE?

I. As more sellers enter a market, the supply of the product will increase.
II. If input prices increase, the supply of the product will be unaffected because firms
higher costs of production to consumers in the form of higher prices.
III. Firms respond to high prices for their product by offering a larger quantity for sale
A) I
B) II and III
C) I, II, and III
D) I and III

15. Genetically modified soybean seed is an example of a new technology that has
increased productivity. As a result, this new technology production costs and
the supply of soybeans.
A) raised; increased
B) lowered; decreased
C) lowered; increased
D) raised; decreased

16. Suppose that farmers can use their land to grow and sell soybeans and cotton. Cotton
prices have risen. Farmers respond by producing _ soybeans and _ cotton.
A) more; less
B) less; more
C) more; more
D) less; less

Page 4
Use the following to answer question 17:

Figure 2.2

17. (Figure 2.2) If the price of turkey is $4 per pound, pounds of turkey will be
offered for sale; if the price of turkey is $7 per pound, pounds of turkey will be
offered for sale.
A) 3,000; 6,000
B) 0; 6,000
C) 2,000; 5,000
D) 1,000; 8,000

18. Suppose that the supply of a good is given by Q = –50 + 5P, where Q is the quantity
supplied and P is the price measured in dollars per unit. This equation indicates that the
quantity supplied increases by units for every dollar increase in price.
A) 5
B) 45
C) 50
D) 55

Page 5
Use the following to answer question 19:

Figure 2.3

19. (Figure 2.3) An increase in quantity supplied could be indicated by:

A) the supply curve shifting from S1 to S2.
B) the supply curve shifting from S1 to S3.
C) movement up and along supply curve S1.
D) the supply curve shifting from S3 to S2.

20. If the supply curve is QS = 4P - 4, then the highest price at which no producer is willing
to sell the good (i.e., the supply choke price) is:
A) 1
B) 4
C) 3
D) 2

Page 6
Another random document with
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 mind, and directed Secretary Hay to make the following reply,
on the 26th: "The information which has come to the President
since your departure convinces him that the acceptance of the
cession of Luzon alone, leaving the rest of the islands
subject to Spanish rule, or to be the subject of future
contention, can not be justified on political, commercial, or
humanitarian grounds. The cession must be of the whole
archipelago or none. The latter is wholly inadmissible and the
former must therefore be required. The President reaches this
conclusion after most thorough consideration of the whole
subject, and is deeply sensible of the grave responsibilities
it will impose, believing that this course will entail less
trouble than any other and besides will best subserve the
interests of the people involved, for whose welfare we can not
escape responsibility."

Two days later, the moral and political reflections of the

President on the subject were expressed still further to the
commissioners by Secretary Hay, in the following telegram:

"While the Philippines can be justly claimed by conquest,

which position must not be yielded, yet their disposition,
control, and government the President prefers should be the
subject of negotiation as provided in the protocol. It is
imperative upon us that as victors we should be governed only
by motives which will exalt our nation. Territorial expansion
should be our least concern; that we shall not shirk the moral
obligations of our victory is of the greatest.
{624}
It is undisputed that Spain's authority is permanently
destroyed in every part of the Philippines. To leave any part
in her feeble control now would increase our difficulties and
be opposed to the interests of humanity. The sentiment in the
United States is almost universal that the people of the
Philippines, whatever else is done, must be liberated from
Spanish domination. In this sentiment the President fully
concurs. Nor can we permit Spain to transfer any of the
islands to another power. Nor can we invite another power or
powers to join the United States in sovereignty over them. We
must either hold them or turn them back to Spain.
Consequently, grave as are the responsibilities and unforeseen
as are the difficulties which are before us, the President can
see but one plain path of duty—the acceptance of the archipelago.
Greater difficulties and more serious
complications—administrative and international—would follow
any other course. The President has given to the views of the
commissioners the fullest consideration, and in reaching the
conclusion above announced in the light of information
communicated to the commission and to the President since your
departure, he has been influenced by the single consideration
of duty and humanity. The President is not unmindful of the
distressed financial condition of Spain, and whatever
consideration the United States may show must come from its
sense of generosity and benevolence, rather than from any real
or technical obligation. The terms upon which the full cession
of the Philippines shall be made must be left largely with the
commission."

On the 3d of November, Judge Day cabled: "After a careful

examination of the authorities, the majority of the commission
are clearly of opinion that our demand for the Philippine
Islands can not be based on conquest. When the protocol was
signed Manila was not captured, siege was in progress and
capture made after the execution of the protocol. Captures
made after agreement for armistice must be disregarded and
status quo restored as far as practicable. We can require
cession of Philippine Islands only as indemnity for losses and
expenses of the war. Have in view, also, condition of islands,
the broken power of Spain, anarchy in which our withdrawal would
leave the islands, etc. These are legitimate factors."

On the 4th, Senator Davis added a personal telegram as

follows: "I think we can demand cession of entire archipelago
on other and more valid grounds than a perfected territorial
conquest of the Philippine Islands, such as indemnity or as
conditions of peace imposed by our general military success
and in view of our future security and general welfare,
commercial and otherwise. I think the protocol admits all
these grounds, and that the ground alone of perfected
territorial conquest of the Philippine Islands is too narrow
and untenable under protocol."

Secretary Hay replied, for the President, on the 5th: "The

President has no purpose to question the commission's judgment
as to the grounds upon which the cession of the archipelago is
to be claimed. His only wish in that respect is to hold all
the ground upon which we can fairly and justly make the claim.
He recognizes fully the soundness of putting forward indemnity
as the chief ground, but conquest is a consideration which
ought not to be ignored. How our demand shall be presented,
and the grounds upon which you will rest it, he confidently
leaves with the commissioners. His great concern is that a
treaty shall be effected in terms which will not only satisfy
the present generation but, what is more important, be
justified in the judgment of posterity."

Discussion followed, in which Judge Day and Senator Gray

repeated the views they had formerly expressed, in dissent
from the policy determined upon by the President and his
cabinet, the latter saying: "Believing that the result of a
failure to obtain a treaty would be the forcible seizure of
the whole Philippine Islands group, an event greatly to be
deprecated as inconsistent with the traditions and
civilization of the United States, I would be willing to take
the islands by the cession of a treaty of peace, and I would,
to that end, make such reasonable concessions as would comport
with the magnanimity of a great nation dealing with a weak and
prostrate foe. I mean that I would prefer the latter
alternative to the former, not that I have changed my mind as
to the policy of taking the Philippine Islands at all."
So far as concerned the demands of the United States (which
Spain was powerless to resist), the question was settled, on
the 13th of November, by a telegram from Secretary Hay to Mr.
Day, in which he said: "We are clearly entitled to indemnity
for the cost of the war. We can not hope to be fully
indemnified. We do not expect to be. It would probably be
difficult for Spain to pay money. All she has are the
archipelagoes of the Philippines and the Carolines. She surely
can not expect us to turn the Philippines back and bear the cost
of the war and all claims of our citizens for damages to life
and property in Cuba without any indemnity but Porto Rico,
which we have and which is wholly inadequate. … You are
therefore instructed to insist upon the cession of the whole
of the Philippines, and, if necessary, pay to Spain ten to
twenty millions of dollars, and if you can get cession of a
naval and telegraph station in the Carolines, and the several
concessions and privileges and guaranties, so far as
applicable, enumerated in the views of Commissioners Frye and
Reid, you can offer more."

United States, 56th Congress, 2d Session,

Senate Document Number 148
(Papers relating to the Treaty with Spain).

Discussion between the Spanish and American commissioners at

Paris was prolonged until the 10th of December, when the
former yielded to what they protested against as hard terms,
and the following Treaty of Peace was signed:

Treaty of Peace.

ARTICLE I.
Spain relinquishes all claim of sovereignty over and title to
Cuba. And as the island is, upon its evacuation by Spain, to
be occupied by the United States, the United States will, so
long as such occupation shall last, assume and discharge the
obligations that may under international law result from the
 fact of its occupation, for the protection of life and
property.

ARTICLE II.
Spain cedes to the United States the island of Porto Rico and
other islands now under Spanish sovereignty in the West
Indies, and the island of Guam in the Marianas or Ladrones.

{625}

ARTICLE III.
Spain cedes to the United States the archipelago known as the
Philippine Islands, and comprehending the islands lying within
the following line: A line running from west to east along or
near the twentieth parallel of north latitude, and through the
middle of the navigable channel of Bachi, from the one hundred
and eighteenth (118th) to the one hundred and twenty seventh
(127th) degree meridian of longitude east of Greenwich, thence
along the one hundred and twenty seventh (127th) degree
meridian of longitude east of Greenwich to the parallel of
four degrees and forty five minutes (4° 45') north latitude,
thence along the parallel of four degrees and forty five
minutes (4° 45') north latitude to its intersection with the
meridian of longitude one hundred and nineteen degrees and
thirty five minutes (119° 35') east of Greenwich, thence along
the meridian of longitude one hundred and nineteen degrees and
thirty five minutes (119° 35') east of Greenwich to the
parallel of latitude seven degrees and forty minutes (7° 40')
north, thence along the parallel of latitude of seven degrees
and forty minutes (7° 40') north to its intersection with the
one hundred and sixteenth (116th) degree meridian of longitude
east of Greenwich, thence by a direct line to the intersection
of the tenth (10th) degree parallel of north latitude with the
one hundred and eighteenth (118th) degree meridian of
longitude east of Greenwich, and thence along the one hundred
and eighteenth (118th) degree meridian of longitude east of
Greenwich to the point of beginning. The United States will
pay to Spain the sum of twenty million dollars ($20,000,000)
within three months after the exchange of the ratifications of
the present treaty.

ARTICLE IV.
The United States will, for the term of ten years from the
date of the exchange of the ratifications of the present
treaty, admit Spanish ships and merchandise to the ports of
the Philippine Islands on the same terms as ships and
merchandise of the United States.

ARTICLE V.
The United States will, upon the signature of the present
treaty, send back to Spain, at its own cost, the Spanish
soldiers taken as prisoners of war on the capture of Manila by
the American forces. The arms of the soldiers in question
shall be restored to them. Spain will, upon the exchange of
the ratifications of the present treaty, proceed to evacuate
the Philippines, as well as the island of Guam, on terms
similar to those agreed upon by the Commissioners appointed to
arrange for the evacuation of Porto Rico and other islands in
the West Indies, under the Protocol of August 12, 1898, which
is to continue in force till its provisions are completely
executed. The time within which the evacuation of the
Philippine Islands and Guam shall be completed shall be fixed
by the two Governments. Stands of colors, uncaptured war
vessels, small arms, guns of all calibres, with their
carriages and accessories, powder, ammunition, livestock, and
materials and supplies of all kinds, belonging to the land and
naval forces of Spain in the Philippines and Guam, remain the
property of Spain. Pieces of heavy ordnance, exclusive of
field artillery, in the fortifications and coast defences,
shall remain in their emplacements for the term of six months,
to be reckoned from the exchange of ratifications of the
treaty; and the United States may, in the meantime, purchase
such material from Spain, if a satisfactory agreement between
the two Governments on the subject shall be reached.
ARTICLE VI.
Spain will, upon the signature of the present treaty, release
all prisoners of war, and all persons detained or imprisoned
for political offences, in connection with the insurrections
in Cuba and the Philippines and the war with the United
States. Reciprocally the United States will release all
persons made prisoners of war by the American forces, and will
undertake to obtain the release of all Spanish prisoners in
the hands of the insurgents in Cuba and the Philippines. The
Government of the United States will at its own cost return to
Spain and the Government of Spain will at its own cost return
to the United States, Cuba, Porto Rico, and the Philippines,
according to the situation of their respective homes,
prisoners released or caused to be released by them,
respectively, under this article.

ARTICLE VII.
The United States and Spain mutually relinquish all claims for
indemnity, national and individual, of every kind, of either
Government, or of its citizens or subjects, against the other
Government, that may have arisen since the beginning of the
late insurrection in Cuba and prior to the exchange of
ratifications of the present treaty, including all claims for
indemnity for the cost of the war. The United States will
adjudicate and settle the claims of its citizens against Spain
relinquished in this article.

ARTICLE VIII.
In conformity with the provisions of Articles I, II, and III
of this treaty, Spain relinquishes in Cuba, and cedes in Porto
Rico and other islands in the West Indies, in the island of
Guam, and in the Philippine Archipelago, all the buildings,
wharves, barracks, forts, structures, public highways and
other immovable property which, in conformity with law, belong
to the public domain, and as such belong to the Crown of
Spain. And it is hereby declared that the relinquishment or
 cession, as the case may be, to which the preceding paragraph
refers, cannot in any respect impair the property or rights
which by law belong to the peaceful possession of property of
all kinds, of provinces, municipalities, public or private
establishments, ecclesiastical or civic bodies, or any other
associations having legal capacity to acquire and possess
property in the aforesaid territories renounced or ceded, or
of private individuals, of whatsoever nationality such
individuals may be. The aforesaid relinquishment or cession,
as the case may be, includes all documents exclusively
referring to the sovereignty relinquished or ceded that may
exist in the archives of the Peninsula. Where any document in
such archives only in part relates to said sovereignty, a copy
of such part will be furnished whenever it shall be requested.
Like rules shall be reciprocally observed in favor of Spain in
respect of documents in the archives of the islands above
referred to. In the aforesaid relinquishment or cession, as
the case may be, are also included such rights as the Crown of
Spain and its authorities possess in respect of the official
archives and records, executive as well as judicial, in the
islands above referred to, which relate to said islands or the
rights and property of their inhabitants. Such archives and
records shall be carefully preserved, and private persons
shall without distinction have the right to require, in
accordance with law, authenticated copies of the contracts,
wills and other instruments forming part of notarial protocols
or files, or which may be contained in the executive or
judicial archives, be the latter in Spain or in the islands
aforesaid.

{626}

ARTICLE IX.
Spanish subjects, natives of the Peninsula, residing in the
territory over which Spain by the present treaty relinquishes
or cedes her sovereignty, may remain in such territory or may
remove therefrom, retaining in either event all their rights
of property, including the right to sell or dispose of such
property or of its proceeds; and they shall also have the
right to carry on their industry, commerce and professions,
being subject in respect thereof to such laws as are
applicable to other foreigners. In case they remain in the
territory they may preserve their allegiance to the Crown of
Spain by making, before a court of record, within a year from
the date of the exchange of ratifications of this treaty, a
declaration of their decision to preserve such allegiance; in
default of which declaration they shall be held to have
renounced it and to have adopted the nationality of the
territory in which they may reside. The civil rights and
political status of the native inhabitants of the territories
hereby ceded to the United States shall be determined by the
Congress.

ARTICLE X.
The inhabitants of the territories over which Spain
relinquishes or cedes her sovereignty shall be secured in the
free exercise of their religion.

ARTICLE XI.
The Spaniards residing in the territories over which Spain by
this treaty cedes or relinquishes her sovereignty shall be
subject in matters civil as well as criminal to the
jurisdiction of the courts of the country wherein they reside,
pursuant to the ordinary laws governing the same; and they
shall have the right to appear before such courts, and to
pursue the same course as citizens of the country to which the
courts belong.

ARTICLE XII.
Judicial proceedings pending at the time of the exchange of
ratifications of this treaty in the territories over which
Spain relinquishes or cedes her sovereignty shall be
determined according to the following rules:
1. Judgments rendered either in civil suits between private
individuals, or in criminal matters, before the date
mentioned, and with respect to which there is no recourse or
right of review under the Spanish law, shall be deemed to be
final, and shall be executed in due form by competent
authority in the territory within which such judgments should
be carried out.

2. Civil suits between private individuals which may on the

date mentioned be undetermined shall be prosecuted to judgment
before the court in which they may then be pending or in the
court that may be substituted therefor.

3. Criminal actions pending on the date mentioned before the

Supreme Court of Spain against citizens of the territory which
by this treaty ceases to be Spanish shall continue under its
jurisdiction until final judgment; but, such judgment having
been rendered, the execution thereof shall be committed to the
competent authority of the place in which the case arose.

ARTICLE XIII.
The rights of property secured by copyrights and patents
acquired by Spaniards in the Island of Cuba and in Porto Rico,
the Philippines and other ceded territories, at the time of
the exchange of the ratifications of this treaty, shall
continue to be respected. Spanish scientific, literary and
artistic works, not subversive of public order in the
territories in question, shall continue to be admitted free of
duty into such territories, for the period of ten years, to be
reckoned from the date of the exchange of the ratifications of
this treaty.

ARTICLE XIV.
Spain will have the power to establish consular officers in
the ports and places of the territories, the sovereignty over
which has been either relinquished or ceded by the present
treaty.
ARTICLE XV.
The Government of each country will, for the term of ten
years, accord to the merchant vessels of the other country the
same treatment in respect of all port charges, including
entrance and clearance dues, light dues, and tonnage duties,
as it accords to its own merchant vessels, not engaged in the
coastwise trade. This article may at any time be terminated on
six months notice given by either Government to the other.

ARTICLE XVI.
It is understood that any obligations assumed in this treaty
by the United States with respect to Cuba are limited to the
time of its occupancy thereof; but it will upon the
termination of such occupancy, advise any Government
established in the island to assume the same obligations.

ARTICLE XVII.
The present treaty shall be ratified by the President of the
United States, by and with the advice and consent of the
Senate thereof, and by Her Majesty the Queen Regent of Spain;
and the ratifications shall be exchanged at Washington within
six months from the date hereof, or earlier if possible. In
faith whereof, we, the respective Plenipotentiaries, have
signed this treaty and have hereunto affixed our seals. Done
in duplicate at Paris, the tenth day of December, in the year
of Our Lord one thousand eight hundred and ninety-eight.

[Signed]
William R. Day,
Cushman K. Davis,
William P. Frye,
Geo. Gray,
Whitelaw Reid,
Eugenio Montero Ríos,
B. de Abarzuza,
J. de Garnica,
 W. R. de Villa Urrutia,
Rafael Cerero.

That the treaty would be ratified by the Senate of the United

States was by no means certain when it was signed, and
remained questionable for two months.

See below:
UNITED STATES OF AMERICA: A. D. 1899 (JANUARY-
FEBRUARY).

Some time after the conclusion of the treaty, it was

discovered that the boundaries defined in it for the cession
of the Philippine Islands failed to include the islands of
Cagayan, or Kagayan, and Sibutu, in the southern part of the
archipelago. Still later, it was found that several small
islands (the Bachi or Bashee group, and others) belonging to
the Spanish possessions in the East were left lying outside of
the northern Philippine boundary, as laid down in the treaty
of cession. It is said that the Japanese government called
attention to this latter error, desiring to have the islands
in question, which are near to Formosa, controlled by the
United States, rather than by Spain. By a new treaty with
Spain, negotiated in 1900, all these outlying islands were
acquired by the United States, for the sum of $100,000.

UNITED STATES OF AMERICA: A. D. 1898 (August).

Losses of the armies at Santiago and in the Philippines.

See below:
UNITED STATES OF AMERICA: A. D. 1900 (JUNE).

{627}

UNITED STATES OF AMERICA: A. D. 1898 (August 21).

The War with Spain.
Letter from departing Spanish soldiers to the soldiers
of the American army.

The following letter, addressed, on the eve of their departure

for Spain, by the Spanish soldiers at Santiago, to the
soldiers of the American army, "is surely," says
Lieutenant-Colonel Miley, who quotes it in his book entitled
"In Cuba with Shafter"—"is surely the most remarkable letter
ever addressed by vanquished soldiers to their conquerors:

'Soldiers of the American Army: We would not be fulfilling our

duty as well-born men in whose breasts there lives gratitude
and courtesy, should we embark for our beloved Spain without
sending you our most cordial and sincere good wishes and
farewell. We fought you with ardor and with all our strength,
endeavoring to gain the victory, but without the slightest
rancor or hate toward the American nation. We have been
vanquished by you, so our generals and chiefs judged in
signing the capitulation, but our surrender and the
blood-battles preceding it have left in our souls no place for
resentment against the men who fought us nobly and valiantly.
You fought and acted in compliance with the same call of duty
as we, for we all but represent the power of our respective
States. You fought us as men, face to face, and with great
courage, as before stated—a quality we had not met with during
the three years we have carried on this war against a people
without a religion, without morals, without conscience, and of
doubtful origin, who could not confront the enemy, but shot
their noble victims from ambush and then immediately fled.
This was the kind of warfare we had to sustain in this
unfortunate land. You have complied exactly with all the laws
and usages of war as recognized by the armies of the most
civilized nations of the world; have given honorable burial to
the dead of the vanquished; have cured their wounded with
great humanity; have respected and cared for your prisoners
and their comfort; and lastly, to us, whose condition was
terrible, you have given freely of food and of your stock of
medicines, and have honored us with distinction and courtesy,
 for after the fighting the two armies mingled with the utmost
harmony. With this high sentiment of appreciation from us all,
there remains but to express our farewell, and with the
greatest sincerity we wish you all happiness and health in
this land, which will no longer belong to our dear Spain, but
will be yours. You have conquered it by force and watered it
with your blood, as your conscience called for under the
demands of civilization and humanity; but the descendants of
the Congos and Guineas, mingled with the blood of unscrupulous
Spaniards and of traitors and adventurers—these people are
not able to exercise or enjoy their liberty, for they will
find it a burden to comply with the laws which govern
civilized humanity. From eleven thousand Spanish soldiers.

(Signed) Pedro Lopez De Castillo, Soldier of Infantry.

Santiago de Cuba, August 21, 1898.'"

UNITED STATES OF AMERICA: A. D. 1898 (August-December).

Situation in the Philippines following the occupation
of Manila by American forces.
Growing distrust and unfriendliness of the Tagalos.
Report of General Otis.

See (in this volume)

PHILIPPINE ISLANDS: A. D. 1898 (AUGUST-DECEMBER).

UNITED STATES OF AMERICA: A. D. 1898 (December).

Organization of military government in Cuba.

See (in this volume)

CUBA: A. D. 1898-1899 (DECEMBER-OCTOBER).

UNITED STATES OF AMERICA: A. D. 1898-1899.

Statistics of the Spanish-American War.

The following military and naval statistics of the war with

Spain, compiled from official sources, were submitted to the
House of Representatives, during its debate on the Army Bill,
in December, 1900, as part of an appendix to a speech made in
support of the Bill by Honorable Charles Dick, of Ohio:

ORGANIZATION AND STRENGTH OF THE ARMY

DURING AND AFTER THE WAR.

By an Act of Congress approved April 22, 1898, providing for

the temporary increase of the military establishment of the
United States, "the organized and active land forces were
declared to consist of the Regular Army and of the militia of
the several States when called into service, constituting two
branches, designated, respectively, as be Regular Army and the
Volunteer Army of the United States. And the President was
authorized to organize the regular and volunteer troops into
divisions of three brigades, each brigade to be composed of
three or more regiments, and when three or more divisions are
present in the same army, to organize them into army corps,
each corps to consist of not more than three divisions. Under
the authority conferred upon him by the joint resolution of
April 20 and the act of April 22, 1898, the President issued a
proclamation, dated April 23, 1898, calling for volunteers to the
number of 125,000 men, to be apportioned as far as practicable
among the several States, Territories, and the District of
Columbia, according to population, to serve for two years
unless sooner discharged. Among the several arms of the
service the troops were apportioned as follows: Five regiments
and 17 troops of cavalry, 16 batteries of light artillery, 1
regiment and 7 batteries of heavy artillery, 119 regiments and
10 battalions of infantry. May 25, 1898, the President issued
a proclamation calling for an additional force of 75,000 men.
For controlling military reasons, it was determined to utilize
so much of this additional force as was necessary to bring up
the several State organizations in service to the full legal
strength, the remainder to be apportioned among the several
States and Territories according to their respective quotas as
nearly as possible. The apportionment to the several arms of
 service under this second call was for 16 batteries of light
artillery, 3 battalions of heavy artillery, and 22 regiments,
ten battalions, and 46 companies of infantry."

The strength of the Regular Army on the 1st of April, 1898,

just before the breaking out of the war, was as follows:

Officers.
Enlisted Men.

General officers and staff corps. 532

2,026
Cavalry. 437
6,047
Artillery. 288
4,486
Infantry. 886
12,828
Miscellaneous.
653

Total. 2,143
26,040

The Regular Army was authorized to be increased to 65,000 men

as a war footing. The total strength of the armies, Regular
and Volunteer, at several later dates, was as follows:

{628}

DATE. Regulars. Volunteers.

Total.
 April 15, 1898 28,183
28,183
May 31, 1898 38,816 124,776
162,592
August 31, 1898 56,362 216,256
272,618
January 31, 1899 65,531 90,241
155,772
June 30, 1899 63,535 16,550
80,085

Maximum force at any one time during Spanish-American war,

274,717 officers and men. On the 29th of November, 1898, the
Army of the United States consisted of 2,324 officers and
61,444 enlisted men of the regular force, and of 5,216
officers and 110,202 enlisted men of the volunteer force,
making an aggregate of 7,540 officers and 171,646 enlisted
men.

PAY OF ARMY.

Payments made to Regular and Volunteer armies engaged during

Spanish-American war, from April 21, 1898, to April 11, 1899,
$67,065,629.56.

CASUALTIES IN ACTION.

In Cuba, Porto Rico, and the Philippines between May 1, 1898,

and June 30, 1899.

Killed Cuba Porto Rico

Philippines
Officers 21
16
Enlisted men 223 4
219

Wounded:
Officers 101
92
Enlisted men 1,344 36
1,349

Died of Wounds:
Officers 10
10
Enlisted men 64 8
82

Died of Disease:
Officers 34 4
11
Enlisted men. 888 251
369

Grand total, 5,136.

Casualties in Fifth Army Corps in campaign against Santiago,

June 22, 1898, to July 17, 1898.

Officers. Enlisted Men.

Killed. 21 222
Wounded 101 1,344

At battle of Las Guasimas, June 24, 1898.

 Officers. Enlisted Men.
Killed. 1 15
Wounded 6 43

At battle of El Caney, July 1, 1898.

Officers. Enlisted Men.

Killed. 4 77
Wounded 25 335

At Aguadores, July 1-2, 1898.

Officers. Enlisted Men.

Killed. 2
Wounded 10

At battle of San Juan, July 1-3, 1898.

Officers. Enlisted Men.

Killed. 15 127
Wounded 69 945

Casualties around Santiago, July 10-12, 1898.

Officers. Enlisted Men.

Killed. 1 1
Wounded 1 11

Grand total of casualties in killed and wounded

during the war with Spain.

WHERE. KILLED.
WOUNDED.

Officers. Enlisted Men. Officers.

Enlisted Men.

Cuba 23 237 99
1,332
Porto Rico. 3 4
36
Manila 17 10
96

Total 23 257 113

1,464

The deaths from all causes (including casualties in action) in

the whole Army, regulars and volunteers, for the fourteen
months from May, 1898, to June, 1899, inclusive, were 6,619.
This is equivalent to an annual rate of 33.03 per thousand of
strength. The deaths from disease during the whole period were
at an annual rate of hut 25.68 per thousand. These were as
follows:

STATIONS. Number of Deaths Rate per

1,000.

United States 3,577 23.81

Cuba 928 45.14
Porto Rico 238 38.15
Philippines 402 17.20

{629}

Deaths in the armies of the United States, by countries,