AP Success - AP US History: Rise of Carnegie Steel & Industry
"As the U.S. entered a period of economic expansion following the Civil War, mass-produced steel became increasingly in demand. Railroads expanded westward, urban populations grew, necessitating the introduction of skyscrapers and thus more structurally resilient materials…
Carnegie Steel…became the dominant steel supplier in the U.S. through a vertically-integrated manufacturing process that consistently incorporated the latest technological innovation.
Steel is a commodity product, so successful business is built on low-cost production. Carnegie executed on its business model in two main ways. The first was owning raw material supply. The steel-making process requires three ingredients: iron ore, coal, and lime; and both iron ore and coal had to be refined before use in steel-making. Second, Carnegie was able to generate unparalleled scale via productivity gains and capacity expansion, creating pricing power…"
“Carnegie Steel: Building a Modern America.” Harvard Business School, Digital Initiative, 2015.
Question 1
Which of the following best describes the economic period in the United States immediately following the Civil War?
A period of economic expansion with increased demand for mass-produced steel.
Stagnation in technological innovation and urban development.
A focus on agricultural development over industrial growth.
A decline in industrial activity and a decrease in demand for construction materials.
Question 2
Carnegie Steel's dominance in the U.S. steel industry was primarily due to its:
Exclusive contracts with the U.S. military for weapon production.
Vertically-integrated manufacturing process and technological innovation.
Monopoly on the importation of foreign steel.
Use of traditional steel-making techniques that favored craftsmanship.
Question 3
In the context of the steel industry, what does the term 'vertically-integrated' refer to?
Outsourcing the extraction of raw materials to reduce costs.
Owning the supply chain for raw materials and controlling the production process.
Collaborating with competitors to set industry standards and prices.
Focusing solely on the final stage of steel production and distribution.
Question 4
What were the main ingredients required in the steel-making process as mentioned in the source?
Iron ore, coal, and lime.
Copper, tin, and limestone.
Nickel, quartz, and clay.
Aluminum, silicon, and gypsum.
Question 5
Carnegie Steel's business model emphasized low-cost production. Which of the following strategies was NOT mentioned as a way Carnegie achieved this?
Owning the supply of raw materials like iron ore and coal.
Refining raw materials before use in steel-making.
Importing cheaper raw materials from overseas.
Generating scale through productivity gains and capacity expansion.
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