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vi Contents

2.3 Indirect Utility Function 94

2.4 WARP and Demand 99
2.5 Slutsky Matrix 109
2.6 Expenditure Minimization Problem 117
2.7 Relationships between the Expenditure Function and Hicksian Demand 128
2.8 Relationship between the Walrasian and Hicksian Demand 129
2.9 Relationship between the Walrasian Demand and the Indirect Utility Function 133
2.10 Summary of Relationships 134
Appendix A: Duality in Consumption 139
Appendix B: Relationship between the Expenditure Function and Hicksian Demand 146
Appendix C: Generalized Axiom of Revealed Preference 148
Exercises 153
References 161

3 Demand Theory-Applications 163

3.1 Measuring the Welfare Effects of a Price Change 164
3.2 Measuring the Welfare Change Associated with the Introduction of a Tax 172
3.3 What If We Use the Walrasian Demand to Measure Welfare Changes? 173
3.4 When Can We Use the Walrasian Demand as a Measure of Welfare Change? 179
3.5 Application of Income and Substitution Effects-! 182
3.6 Application of Income and Substitution Effects---11: The Consumer as a Labor
Supplier 184
3.7 Application of Income and Substitution Effects-III: Income and Substitution Effects
among Different Goods 194
3.8 Aggregate Demand 202
Appendix: Applying Euler's Theorem to the Hicksian Demand 208
Exercises 210
References 220

4 Produdlon Theory 221

4.1 Production Sets 222
4.2 Properties ofProduction Sets 229
4.3 Elasticity of Substitution 244
4.4 Profit Maximization 249
4.5 Cost Minimization 264
Contents vii

4.6 Cost Function 274

4.7 Conditional Factor Demand Correspondence, z(w, q) 275
4.8 Production Function,j{z) 282
4.9 Alternative Representation of the PMP 283
4.10 Average and Marginal Costs with a Single Output 289
4.11 Aggregation in Production 294
4.12 Efficient Production 297
Appendix A: Graphical Representation of Cost Functions 304
Appendix B: Output and Cost Elasticity 311
Exercises 316
References 321

5 Choice under Uncertainty 323

5.1 Simple and Compound Lotteries 324
5.2 Preferences over Lotteries 329
5.3 Violations of the IA 341
5.4 Behavioral Theories That Modify Expected Utility Theory 345
5.5 Money Lotteries 348
5.6 Measuring Risk Preferences 353
5.7 Arrow-Pratt Coefficients ofAbsolute and Relative Risk Aversion 360
5.8 Prudence 366
5.9 Prospect Theory and Reference-Dependent Utility 368
5.10 Comparison of Payoff Distributions 372
5.11 Subjective Probability Theory 381
5.12 Alternatives to SEU: Ambiguity Aversion (MEU), Capacities (CEU), and Smooth
Ambiguity Aversion (SAA) 384
Appendix A: State-Dependent Utility 391
Appendix B: "Extended" Expected Utility Representation 393
Exercises 398
References 408

6 Partial and General Equilibrium 411

6.1 Partial Equilibrium Analysis 412
6.2 Comparative Statics 419
6.3 Welfare Analysis 424
viii Contents

6.4 General Equilibrium 428

6.5 Comparative Statics 460
6.6 Introducing Taxes 466
Appendix A: Large Economies and the Core 468
Appendix B: Marshall-Hicks Fow- Laws of Derived Demand 4 77
Exercises 479
References 487

7 Monopoly 489
7.1 Barriers to Entry 490
7.2 Profit-Maximizing Output under Monopoly 491
7.3 Welfare Loss of Monopoly 499
7.4 Comparative Statics 504
7.5 Multiplant Monopolist 506
7.6 Price Discrimination 509
7.7 Advertising in Monopoly 529
7.8 Regulation ofNatw-al Monopolies 531
7.9 Monopsony 536
Exercises 539
References 546

8 Game Theory and Imperfect Competition 547

8.1 Game Theory Tools 548
8.2 Bertrand Model of Price Competition with Homogeneous Products 580
8.3 COW"not Model of Quantity Competition 584
8.4 Product Differentiation 594
8.5 Dynamic Competition 598
8.6 Reconciling Cow-not and Bertrand: Introducing Capacity Constraints 606
8.7 Endogenous Entry 610
8.8 Repeated Interaction 614
Appendix A: COW"not Model with Asymmetric Costs 625
Appendix B: COW"not Competition with J"?:. 2 Firms 627
Exercises 629
References 638
Contents iX

9 Externalities and Public Goods 641

9.1 Externalities 643
9.2 Common Pool Resources 649
9.3 Solutions to the Externality Problem 657
9.4 Regulating a Polluting Monopolist 669
9.5 Regulating a Polluting Oligopoly 671
9.6 Fee Comparison 676
9.7 Setting Quotas under Incomplete Information 680
9.8 Setting Emission Fees under Incomplete Information 682
9.9 Comparing Policy Instruments under Incomplete Information 684
9.10 PollutionAbatement 685
9.11 Public Goods 690
9.12 Inefficiency of the Private Provision of Public Goods 693
9.13 Neutrality and the Crowding-out Effect 699
9.14 Remedies to the Underprovision of Public Goods 702
9.15 Lindahl Equilibria 704
9.16 Public Goods That Experience Congestion 707
9.17 Behavioral Motives in Public Good Games 708
Appendix: More General Policy Mechanisms 718
Exercises 722
References 731

10 Contract Theory 735

10.1 Moral Hazard 736
10.2 Moral Hazard with a Continuum of Effort Levels-The First-Order Approach 751
10.3 Moral Hazard with Multiple Signals 759
10.4 Adverse Selection-The ''Lemons" Problem 761
10.5 Adverse Selection-The Principal-Agent Problem 766
10.6 Application ofAdverse Selection-Regulation 777
Exercises 785
References 800
 Contents

Mathematical Appendix 803

A.1 Sets 803
A.2 Intervals ofReal Numbers 805
A.3 Inequalities 806
A.4 Sequences 808
A.5 Functions 812
A.6 Limits 816
A.7 Continuity 818
A.8 Differentiation 825
A.9 Integration 832
A.lO Introduction to Topology 835
A.11 Compactness 842
A.12 Fixed Point Theorems 845
A.l3 Optimization 848
A.14 Comparative Statics 853
A.l5 Monotone Comparative Statics: An Introduction 856
A.16 Introduction to Mathematical Proofs 857
References 858

Index 861
Preface

This textbook offers a friendly introduction to advanced microeconomic theory that

undergraduate and graduate students can use to transition into more technical topics.
Every chapter explicitly connects the materials of Intermediate microeconomics
courses with the topics taught in most Master's programs (and some PhD courses) dur-
ing the first semester: preference relations, demand theory and applications, producer
theory, and choice under uncertainty; and some of the topics studied during the second
semester: partial and general equilibrium, monopoly, oligopoly models, externalities
and public goods, and contract theory.
The presentation differs from current graduate-level textbooks-essentially,
Mas-Colell et al. (1995), Jehle and Reny (2011), and Varian (1992)----along several
dimensions: (1) it emphasizes the economic intuition behind mathematical properties
and assumptions, (2) it provides several step-by-step examples in every chapter in
order to help students to apply theoretical results using specific functional forms, and
(3) it includes several sections discussing topics on behavioral economics. Therefore,
while the presentation includes advanced materials covered in Master's and PhD
programs, the economic interpretations and examples make the exposition easy to
understand for upper-level undergraduate students as well. This textbook should
therefore be especially attractive for students in Master's programs-in disciplines
such as Economics, Finance, and Public Policy-as well as for PhD students in pro-
grams with a strong applied focus. Unfortunately, current graduate-level textbooks
provide limited intuition and applications, leaving many students with the impression
that their first year of graduate school is disconnected from the topics they learned
as undergraduates, ultimately discouraging students from finishing their graduate
studies. In contrast, this textbook seeks to provide a more explicit bridge to graduate-
level microeconomic theory, thus preparing students to easily apply theory to their
future research interests.
Xii preface

The textbook is accompanied by a Workbook for Advanced Microeconomic Theory,

which includes a complete set of exercises for every chapter with detailed answer keys
(1 06 exercises in total). In particular, the Workbook offers step-by-step explanations so
that students can better understand how to approach similar exercises on their own, and
emphasizes the economic intuition behind mathematical results. As a consequence the
Workbook is mdically different from solution manuals currently in the market, which
rarely provide detailed explanations, are difficult to read on their own, and are only
distributed to instructors. The combination of textbook and workbook is hence the
only combination of its kind in the market, and together, they seek to help graduate
students improve both their theoretical and practical preparation in advanced micro-
econorrucs.

Organization of the Book

The first two chapters are dedicated to consumer theory, first describing preference
relations and utility functions (chapter 1), and then presenting demand theory (chapter
2). Chapter 3 provides a more applied perspective by using the tools learned in previ-
ous chapters to evaluate the welfare change that results from a price change, and the
setting of different types of taxes. Chapters 4 and 5 study topics on choice under un-
certainty and production theory, respectively, and chapter 6 analyzes partial and gen-
eral equilibrium. The last four chapters examine equilibrium behavior under market
imperfections, namely monopoly (chapter 7), imperfect competition (chapter 8), exter-
nalities and public goods (chapter 9), and contract theory (chapter 10), and these last
chapters discuss how regulation can induce private agents to voluntarily produce
socially optimal outcomes. Every chapter includes several parametric examples that
apply the main theoretical results to specific functional forms, and further reading
recommendations are noted throughout each chapter.

How to Use This Textbook

The writing style of the textbook, and the possibility of combining it with the Work-
book, allows for flexible uses by instructors:
Upper-undergraduate and Master's programs Instructors in these courses can as-
sign chapters of the textbook as required readings, since they are self-contained and
their explanations should be easily accessible. Additionally instructors could assign
the reading of specific exercises in the Workbook, which should help students better
Preface Xiii

understand the application of theoretical foundations, ultimately helping them to be-

come better prepared for homework assignments and exams.
PhD level-applied approach Instructors can assign this textbook as the main
reading reference, complementing it with journal articles, and the reading of
certain exercises of the Workbook. As mentioned above, this strategy could be
particularly effective to ensure that students can more easily link theoretical topics
with applications.
PhD level-theoretical approach Instructors preferring a more theoretical focus
can recommend chapters as an introduction to the more advanced topics covered in
class. This strategy can prove especially useful, as it could allow instructors to dedicate
more time to discussing theoretical foundations in class, such as detailed proofs and
recent journal articles. Instructors could also assign the reading of a list of exercises
from the Workbook, in order to facilitate the comprehension of the main theoretical
results and its application to specific settings.

Examples of Course Guidelines

Master's programs in Economics Schools offering two semesters in microeconomic

theory could cover chapters 1 through 5 in the first semester, and chapters 6 through 10
in the second semester. Schools only offering one-semester course could cover chap-
ters 1 through 6 if their focus is on consumer and producer theory, or chapters 1, 2, 5,
and 7 through 10 if their focus is on market imperfections and contract theory.
Master's progrllllls in Finance If the program only offers a one-semester course in
microeconomic theory, a natural list of tentative chapters (with a focus on optimal
decision making, uncertainty, strategy, and contracts) would be chapters 1, 2, 5, 7,
8, and 10.
Master's programs in Public Policy If the program only offers a one-semester
course in microeconomic theory, a natural list of tentative chapters (with a focus on
consumer and producer theory, market imperfections, and public policies addressing
these market imperfections) would be chapters 1, 2, 3, and 7-10
PhD programs in Economics or Finance Most programs require two semesters in
microeconomic theory, and often focus on consumer and producer theory during the
first semester (chapters 1 through 6, thus including partial and general equilibrium);
and analyze game theory, market imperfections and contract theory during the second
semester (chapters 7 through 10).
xiv preface

Undergraduate courses Courses such as a one-semester ''Topics in Microeconom-

ics" for seniors might include a subset of chapters from the textbook (about five chap-
ters or less), depending on the topics that instructors plan to emphasize in the course:
• Focus on consumer theory and uncertainty (chapters 1-5)
• Focus on consumer and producer theory, including general equilibrium (chapters
1-4, 6)
• Focus on uncertainty, monopoly, game theory, imperfect competition, externalities
and public goods (chapters 5, 7-9)
• Focus on optimal decision making, uncertainty, strategy and contracts (chapters 1,
2, 5, 8, 10)
• Focus on strategy, market imperfections and regulation (chapters 7-10)

Ancillary Materials

Workbook for Advanced Microeconomic Theory The accompanying Workbook

includes step-by-step answer keys with intuitive explanations to all odd-numbered
end-of-chapter exercises (106 exercises). These exercises and their answer keys are
intended to facilitate students' preparation for their own homework assignments and
exams (at both the Master's and PhD levels) and to help students strengthen the core
topics before transitioning into more challenging materials (at the PhD level). A set
of exercises could be assigned as a required reading for every chapter during the
semester, since they could effectively support students' learning.
Solutions Manual for Advanced Microeconomic Theory The accompanying
Solutions Manual provides detailed answer keys to all chapter exercises (215 exercises
in total). The Solutions Manual is only available to instructors.
PowerPoint slides The accompanying PowerPoint slides cover the main topics in
every chapter of the current textbook. They can be used by instructors, edited in order
to elaborate on specific topics, and distributed to students as a first set of lecture notes
they can complement with in-class explanations.

Acknowledgments

I would first like to thank several colleagues who encouraged me in the preparation
of this manuscript: Ana Espinola-Arredondo, Ron Mittlehammer, and Alan Love. I
am, of course, especially grateful to my teachers and advisors at the University of
Pittsburgh, for instilling a passion for applied theory that the reader will hopefully
Preface XV

notice in the following pages. I am also thankful to the "team,. ofteaching and research
assistants at Washington State University, who helped me with this project over sev-
eral years: Eric Dunaway, SherzodAkhundjanov, XinZhao, Tongzhe Li, Brett Devine,
Max St. Brown, Matthew Campbell, Shuo Li, and Xiaonan Liu. I also thank the gradu-
ate students who gave me detailed feedback on earlier versions of the manuscript:
Dinkar Kuchibhotla, Megan Waldrop, Chris Clarke, Pak Sing Choi, Daegoon Lee,
Tony Delmond, Modhurima Amin, Boris Houenou, Devin Gray, and John Strandholm;
and Francisca Espinola for her help editing figures. I am also grateful to the publishing
team at MIT Press, especially John Covell, Emily Taber, Dana Andrus, and Laura
Keeler, who supported this project and provided motivation from its inception. Last,
but not least, I would like to thank my wife, Ana Espinola-Arredondo, for encouraging
me during the preparation of the manuscript and for carefully reviewing most of
the chapters. She always believed in the potential of the intuitive explanations, its
mathematical formulation, and the accompanying worked-out exercises as a guide for
students.
1 Preferences and Utility

How can we formally describe an individual's preference for different amounts of a

good? And, how can we represent his preference for a particular list of goods (a bun-
dle) over another? In this chapter we study preference relations over bundles, their
mathematical representation, and different properties that preferences can satisfy. We
seek, for instance, to formalize the notion of desirability (preferring more units of at
least one good, and perhaps of all goods). We also explore other properties such as
completeness (the individual's ability to compare any two bundles we show at him),
transitivity (by which his preferences cannot suffer from cycles), convexity (which
implies that an individual is better off with balanced than unbalanced bundles), or
monotonicity, which states that an individual is strictly better off when the amount of
one good increases, while the amounts of all other goods are unaffected. We test which
of these properties are satisfied/violated for different preference relations in the
worked-out examples of the chapter.
In our discussion we examine under which conditions an individual's preference
relation can be mathematically represented with a utility function. This is not just a
mathematical curiosity. Rather, it provides several benefits: (1) utility functions allow
for algebraic manipulation, (2) they can be graphically represented (i.e., we can depict
their level sets, which we refer to as "indifference curves"), (3) their partial derivative
helps us better understand whether utility increases/decreases when the consumption
of one (or several) goods increases, and (4) in subsequent chapters we will differenti-
ate them in order to find the bundle/s that maximizes an individual's utility. We also
explore how the properties of preference relations discussed in the first section of the
chapter affect the utility function that represents them.
We also provide a brief review of the behavioral economics literature. This literature
has expanded significantly in the last two decades. In particular, it has offered utility
functions that try to account for a recurrent observation in controlled experiments
2 Chapter1

whereby individuals not only seem to value their own material well-being but also that
of other individuals in the society, commonly referred to as "social preferences." We
also describe two other types of behavioral theories. The first assumes that the utility
an individual obtains from consuming a certain bundle not only depends on the char-
acteristics of that bundle but also on how such bundle compares to a reference bundle,
often referred to as "reference-dependent" preferences. The second discusses hyper-
bolic (and quasi-hyperbolic) discounting of future payoffs.
The chapter then explores a different approach to preferences, the "choice-based"
approach, which analyzes actual choices rather than preferences over potentially avail-
able bundles. The chapter concludes with a mathematical description of constraints on
the set of goods that the individual can feasibly consume, for instance, restricting the
set of possible bundles to those that the individual can afford. The description on util-
ity functions and constraints in this chapter will constitute the two main ingredients of
the utility maximization problem in the next chapter, whereby the individual decision
maker seeks to maximize his utility subject to a set of constraints.

1.1 Preference and Choice: The Preference-Based Approach

We begin our analysis of individual decision making in an abstract setting. We will

first specify a set of possible alternatives (denoted by set X) for a decision maker.
This set may include the consumption bundles that an individual is considering to
buy, or any other general list of alternatives. For instance, X could be a subset of
!It~ , implying that a bundle x would be an n-dimensional vector (xt, x2, ... , XN); a
common assumption in many applications. Given this set, we will tackle the decision-
making process in two ways, first, using the "preference-based approach" and, sec-
ond, using the "choice-based approach." The first approach explores how the
individual uses his preferences to choose an element (or elements) from the set of
alternatives X We will therefore impose a rationality assumption on the individual's
preferences. The second approach observes instead the actual choices the individual
makes when he is called to choose an element (or elements) from the set of possible
alternatives. As in the preference-based approach, we will impose a consistency
condition on the choices that the individual makes. These two approaches have their
own advantages. For instance, the preference-based approach is based on unobserv-
ables (the individual's preferences), whereas the choice-based approach is based on
observables (the actual choices made by the individual decision maker). The
preference-based approach is more tractable than the choice-based approach, espe-
cially when the set of alternatives X contains many elements, which is usually the
Preferences and Utility 3

case in individual decision-making problems. 1 After describing both approaches, and

the assumptions that we impose on each approach, we investigate the relationship
(and potential equivalence) between them. Hence we examine under which condi-
tions rational preferences imply a consistent choice behavior and under which condi-
tions the opposite relationship holds.

1.1.1 Preference-Based Approach

In the preference-based approach we understand the decision maker's preferences as
his "attitudes" toward the elements in a set of possible alternatives X These attitudes
could be obtained by presenting a questionnaire to the individual in which we ask: For
any pair of elements x andy in the set of alternatives X, namely for all x, y E X, how
do you compare element x andy? Check one and only one box.

D I prefer x toy (which we write as x >- y), or

D I prefer y to x (which we write as y >- x), or
D I am indifferent (which we write as x- y).

Note that we are asking the individual decision maker to check one box. This is related
with the completeness assumption on strict preferences, as we define next.Z

Completeness (in strict preferences) A preference relation is complete if,

for any two alternatives x, y E X, either: alternative x is preferred toy, x >- y; or
alternative y is preferred to x, y >- x; or the individual is indifferent between x and
y, which is expressed as x- y.

The completeness axiom suggests that the individual is capable of comparing

any pair of alternatives that we present to him. This might be a relatively strong as-
sumption if we think about goods that we have not consumed in the past, or goods that
we have not even seen before. Think, for instance, about the last time you were in a
new ethnic restaurant in which the descriptions in the menu did not help you decide
what to order. This assumption, hence, considers that the decision maker has had

1
This explains why the preference-based approach is presented in more detail in most micro-
economics textbooks.
2
We do not allow the individual to add a new box in which he writes "I love x but hate y." In other
words, we do not allow him to specify the intensity of his preferences over two alternatives.
Discovering Diverse Content Through
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 The Project Gutenberg eBook of Camp
Venture: A Story of the Virginia Mountains
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Title: Camp Venture: A Story of the Virginia Mountains

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The Project Gutenberg eBook, Camp Venture, by George Cary
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 Camp Venture
A STORY OF THE VIRGINIA MOUNTAINS
By GEORGE CARY EGGLESTON
AUTHOR OF "A CAROLINA CAVALIER," "THE LAST OF THE
FLATBOATS," ETC., ETC.

Illustrated by W. A. McCULLOUGH

Boston: Lothrop, Lee & Shepard

Company
1901
COPYRIGHT,
1901,
By
LOTHROP
PUBLISHING
COMPANY.
ALL RIGHTS RESERVED
Tom leaped upon the mountaineer's back.
 CONTENTS
CHAPTER PAGE
I. On the Mountain Side 11
II. A Picket Shot 30
III. The Doctor's Plans 40
IV. A New Declaration of Independence 46
V. The Building of a Cabin 55
VI. After Supper 71
VII. A "Painter" 78
VIII. The Condition of the Moonshiners 94
IX. A Sunday Discussion 100
X. Beginning Work 108
XI. An Armed Negotiation 115
XII. A Midnight Alarm 122
XIII. A Night of Searching 129
XIV. Tom Gives an Account of Himself 136
XV. Two Shots that Hit 142
XVI. The Doctor Explains 156
XVII. Christmas in Camp Venture 165
XVIII. Parole 175
XIX. A Stress of Circumstances 188
XX. In Perilous Plight 199
XXI. An Enemy to the Rescue 205
XXII. All Night Work 211
XXIII. A Loan Negotiated 224
XXIV. In the High Mountains 232
XXV. A Difficulty 247
 XXVI. The Doctor's Talk 254
XXVII. Some Features of the Situation 262
XXVIII. The Capture of Camp Venture 268
XXIX. A Puzzling Situation 285
XXX. A Point of Honor 297
XXXI. Corporal Jenkins's March 301
XXXII. The Lieutenant's Wrath 307
XXXIII. A Homing Prospect 312
XXXIV. In the Hands of the Enemy 317
XXXV. The End of Camp Venture 326
XXXVI. A Start Down the Mountain 332
XXXVII. Down the Mountain 339
XXXVIII. Old King Coal 344
XXXIX. The Doctor Sings 351
XL. Tom's Journey 358
XLI. "His Majesty the King" 366
XLII. In the Service of the King 381
XLIII. The Camp Venture Mining Company 389
XLIV. Little Tom at the End of it All 396
Camp Venture
 CHAPTER I
On the Mountain Side
"I'm tired, and the other pack mules are tired, and from the way you
move I imagine that the rest of you donkeys are tired!" called out
Jack Ridsdale, as the last of the mules and their drivers scrambled
up the bank and gained a secure foothold on the little plateau.
"I move that we camp here for the night. All in favor say 'aye.' The
motion's carried unanimously."
With that the tall boy threw off the pack that burdened his
shoulders, set his gun up against a friendly tree and proceeded in
other ways to relieve himself of the restraints under which he had
toiled up the steep mountain side since early morning, with only now
and then a minute's pause for breath.
"This is a good place to camp in," he presently added. "There's
grazing for the mules, there's timber around for fire wood and I hear
water trickling down from the cliff yonder. So 'Alabama,' which is
Cherokee eloquence meaning 'here we rest.'"
The party consisted of five sturdy boys and a man, the Doctor, not
nearly so stalwart in appearance, who seemed about twenty-eight or
thirty years old. Each member of the party carried a heavy pack
upon his back and each had a gun slung over his shoulder and an
axe hanging by his girdle. There were four packmules heavily laden
and manifestly weary with the long climb up the mountain.
As the boys were scarcely less weary than the mules they eagerly
welcomed Jack Ridsdale's decision to go no farther that day, but rest
where they were for the night.
"Now then," Jack resumed as soon as he got his breath again—a
thing requiring some effort in the rarefied atmosphere of the high
mountain peak—"we're all starved. The first thing to do is to get a
fire started and get the kettle on for supper. If some of you fellows
will unload the mules and get out the necessary things I'll chop
some wood and we'll have a fire going in next to no time."
With that he swung his axe over his shoulder and stalked off into the
nearby edge of the wood land. There with deft blows—for he was an
expert with the axe—he quickly converted some fallen limbs and
dead trees into a rude sort of fire wood which the other boys
shouldered and carried to the glade where the Doctor had started a
little fire that needed only feeding to become a great one.
During their laborious climb up the steep mountain side the party
had found the early November day rather too warm for comfort; but
now that the sun had sunk behind the mountain, and evening was
drawing near, there was a sharp feeling of coming frost in the
atmosphere, and as it would be necessary to sleep out of doors that
night with no shelter but the stars, Jack continued his chopping until
a great pile of dry wood lay near the fire ready for use during the
night.
In the meantime the other boys busied themselves in getting supper
ready. Harry Ridsdale—Jack's younger brother—prepared a great pot
of coffee, while Ed Parmly fried panful after panful of salt pork, and
Jim Chenowith endeavored to boil some potatoes. "Little Tom"
Ridsdale, another brother of Jack's, employed himself in bringing the
wood as fast as his brother chopped it, and piling it near the fire.
While these things were doing the Doctor had carefully unpacked
some of his scientific instruments and hung them up on trees at
points, convenient for observation.
Presently Ed Parmly called out: "Now fellows, supper's ready—at
least the pork and the coffee are waiting for Jim Chenowith to dish
up his potatoes. Come Jim, what's the matter? Are you trying to boil
those potatoes into mush?"
"No," answered Jim, jabbing the tubers with a stick which he had
sharpened for that purpose, "but somehow the potatoes don't seem
to want to get done. Mother always boils them in from ten to twenty
minutes, according to their size, and these are about the ten minute
size, yet I've boiled them for full half an hour and they're only now
beginning to get soft."
"Your mother's potato kettle," said the Doctor, "isn't boiled at an
elevation of two thousand feet above the sea level and that,"
consulting his aneroid barometer, "is about our present altitude."
"How do you find out that?"
"What has height to do with boiling potatoes?"
These questions were fired at the Doctor instantly.
"One at a time please," said the Doctor, "and as I see Jim is at last
dishing up his potatoes we'll postpone the answer to both questions,
if you don't mind, till we have satisfied our appetites."
The hungry fellows were ready enough to give exclusive attention to
the business in hand, and as they sat there on logs and other
improvised seats with tin plates before them and tin cups at hand
they were a picturesque and attractive group, such as an artist
would have rejoiced to portray.
As is usual with boys in the mountain regions of Southern Virginia,
they were very tall—the older ones nearing, and Jack exceeding, six
feet in height, while even "Little Tom" stood five feet seven in his
socks with a year or two of growth still ahead of him. They were all
robust fellows, too, lean, muscular, thin visaged, clear eyed and
bronzed of face. They wore high boots, into which the legs of their
trousers were thrust, and, over their trousers, thick woollen hunting
shirts, the whole crowned with soft felt hats. It was precisely the
dress which Washington urged upon Congress as the best service
uniform that could be devised for the use of the American army.
"Now then Doctor," said Jim Chenowith, pushing away his tin plate
and swallowing the last of the coffee from his big tin cup, "tell us
why the potatoes wouldn't cook."
"Simply because the water wasn't hot enough to cook them as
quickly as usual."
"Not hot enough? Why it was boiling like a volcano every moment of
the time," said Jim in protest.
"Yes, but the boiling of water doesn't always mean the same thing.
You see at or near the sea level water boils at a temperature of 212
degrees, Fahrenheit. But when you climb up mountains you come
into a rarer and lighter atmosphere and water boils at considerably
lower temperatures."
"But I kept my potato kettle boiling very hard—" interrupted Jim; "I
never stopped firing up under it."
"That made no difference whatever in the amount of heat in it,"
answered the Doctor. "When water boils at all it is just as hot as fire
can make it, unless it is shut completely off from contact with the air,
as is the case in steamboilers. You can't make it any hotter no
matter how much you may 'fire up' under the kettle."
"Why, how's that?" asked "Little Tom," becoming interested. "The
more fire you make in a stove the hotter the stove gets, and the
hotter the room gets, too. Why isn't it the same way with a kettle of
water?"
"I'll explain that," said the Doctor, "and I think I can make you
understand it. When water boils it gives off the vapor which we
commonly call steam. That is to say, some of the water is converted
by heat into vapor. It requires a great deal of heat to make the
change from liquid to vapor and so the process of giving off steam
cools the water. That is why you put a lid on a pot that you wish to
boil quickly. You do it to check the cooling process by confining the
vapor and preventing a too rapid conversion of water into steam."
"Is that the reason that you can hold your hand in the steam from a
kettle when you can't hold it in the water that the steam comes
from," asked Jim.
"Yes. The steam is really hotter than the water, but it needs all its
own heat to keep it in the form of vapor, and so it doesn't give off
enough heat to burn your hand after it gets a little way from the pot
and begins to expand freely. Now as I was saying the harder you
boil water the more steam it gives off and the heating and cooling
processes are so exactly balanced that boiling water stands always
at a uniform temperature no matter whether it is boiling hard as we
say, or only just barely boiling. But in a dense atmosphere it requires
more heat to boil water than it does in a rarefied atmosphere like
that up here on the mountain. At Leadville and other places lying
from 10,000 to 14,000 feet above sea level in the Rocky mountains
you can't boil potatoes at all and it takes full ten minutes to boil an
egg into that condition which we call 'soft.' It all depends upon the
temperature of boiling water, and that is considerably lower here
than down in the valleys where we live."
"But Doctor," said Harry, "you promised to tell us how you find out
how high we are above the sea level."
The Doctor got up, went to a tree and took down a scientific
instrument.
"This," he said, "is an aneroid barometer. It measures the
atmospheric pressure, and as that pressure steadily and pretty
uniformly decreases as we go higher up, the instrument tells us at
once how high we are."
"But will it measure so accurately that you can trust it?" asked one
of the now eagerly interested boys.
"Let me show you," said the Doctor. "Make a torch, for it is growing
dark, and come with me down the hill a little way. First look where
the needle stands now."
They all carefully observed the register and then proceeded with
their mentor down the hill a little way. He there exhibited his
instrument again and it registered fifty feet lower than it had done
on the plateau above. Returning to the camp fire they found that the
needle had resumed its former pointing.
"Then you can tell by that instrument exactly how high you are at
any time?" queried Jack.
"No, not exactly. You see the atmospheric pressure varies somewhat
with the weather even if you observe it always on the same level.
One has to allow for that, but allowing for it we can tell by the
instrument what our elevation is with something closely approaching
accuracy."
Just then came an interruption. A tall rough bearded, unkempt
mountaineer, rifle in hand, stalked out of the woods and approached
the camp fire. After inspecting the company and their belongings in
silence for a time, he spoke a single word of question—"Huntin'?"
"No," answered Jack, who had risen in all his length of limb.
"Trappin'?"
"No."
"Jest campin' out?"
"No," answered Jack, still adhering to that monosyllable.
"Mout I ax then, what ye're a doin' of up here in the high
mountings? You see us fellers what lives up here ain't over fond of
strangers that comes potterin' round without explainin' of their
selves."
"Well" said Jack, "I don't see why I shouldn't tell you what brings us
here. My mother owns a tract of timber land a little further around
the mountain, and it is pretty much all she does own in the world.
She's a widow, and she's had a pretty hard time to bring up three
boys of us"—turning and indicating his two brothers—"and now we
see a way of helping her. They're going to build a railroad down in
the valley on the other side of this mountain, and they want railroad
ties. So we have organized a party and come up here to chop down
trees, make ties and send them down the mountain by a chute."
"Um," answered the mountaineer. "What's them there things for?"
pointing to the Doctor's scientific instruments hanging about on the
trees.
"They are scientific instruments, if you know what that means,"
answered Jack, who was beginning to grow irritable under the
intruder's impertinent questioning.
"What are you goin' to do with 'em? Will they help you to chop
wood?"
"No, of course not. But the Doctor here," indicating him, "is much
interested in science and he has brought his instruments along so as
to make our stay on the mountains as profitable as possible in the
way of study."
"My friend," broke in the Doctor, addressing the mountaineer, "If you
will come to our camp when we get settled I'll show you how I use
these things and what they tell me. One of them tells me how high
up we are and when it's going to storm or clear away; another
shows how fast the wind is blowing, another how cold it is and so
on."
"Which one on 'em tells the strength of whiskey and how much tax
they ought to be paid on it?"
This question was asked with a peculiar tone of sneering incredulity
and suspicion.
"Not one of them has any relation whatever to whiskey or taxes or
anything of the sort," answered the Doctor.
By this time Jack's patience was exhausted and by common consent
Jack was the leader of the party. He turned to the tree behind him,
seized his shot gun, presented it at the mountaineer's breast before
that worthy could bring his rifle to his shoulder, and in an angry, but
still cold voice, said:
"I'll trouble you to lay down that rifle."
The man obeyed.
"Now I'll trouble you, if you please to lay down your powder horn
and your bullet pouch and your cap box and everything else that
pertains to that rifle." All this while Jack was holding the muzzle of
his full-cocked, double barrelled shot gun in front of the man's
breast, while all the other boys had seized their guns and stood
ready for action. The Doctor had not a shot gun, but a repeating,
magazine rifle of the latest make, long in its range, exceedingly
accurate in its fire and equipped with fourteen cartridges in its
magazine that could be fired as fast as their owner pleased. And the
moment that the mountaineer, before he laid down his rifle, made a
motion as if to bring it to his shoulder, the Doctor had stepped to
Jack's side with his destructive weapon in position for instant use.
After the man had laid down his arms, the Doctor stepped back,
lowered his weapon and said to Jack:—"Manage the affair in your
own way. Only be prudent, and above all don't lose your temper."
Jack then said to the mountaineer:
"You've asked us a number of questions. Now I want to ask you
some. What do you mean by intruding upon our camp? Who are
you? What right have you to ask us about ourselves and our mission
in these mountains? Answer man, and answer quick or I'll put two
charges of buck shot through you in less than half a minute."
"Now, don't be too hard on a feller, pard," answered the man. "I
didn't mean no harm in partic'lar. But you see us fellers that lives up
here in the high mountings has a hard enough time to git a livin' and
we don't like to be interfered with by no revenue officers and no
spies and no speculators from down below. You see if we're caught,
some of the money goes to the informer, an' so we takes good keer
to have no informers about, an' if they insist on stayin' we usually
buries 'em. Now you've got the drap on me an' my only chance is to
go way if you'll let me go. So far as I'm concerned you're welcome
to go round the mounting an' chop all the railroad ties an' cordwood
you choose. But there's fellers in the mountings that you ain't got no
drap on, as you've got it on me, an' fellers what ain't so tender
hearted as me. An' so, while I'll leave my gun an' promise never to
meddle with you again if you won't shoot, at the same time my
earnest, friendly, fatherly advice to you boys is to take yourselves
down out'n this mounting jes' as quick as you kin. It ain't no place
for people of your sort."
"We'll do nothing of the kind," answered Jack. "We've come up here
on a perfectly honest and legitimate mission, and we're going to
carry it out. We are not interfering with anybody and I give you
warning that if anybody interferes with us it will be the worse for
him. We are armed, every man of us and we are prepared to use our
arms. Tom,"—turning to his brother,—"take that man's rifle and
discharge it into the cliff back there."
Tom obeyed the command instantly. Then Jack said to their
unwelcome visitor, "Now you can take your rifle and go away. But
don't intrude upon us again. If you do, you'll get the contents of our
guns without any explanations or any arguments. Take your gun and
go!"
The intruder took his gun and accoutrements and without a word
walked away up the mountain through the timber land.
"What does it all mean, Jack?" asked all the boys at once.
"Moonshiners," broke in Tom, sententiously.
Moonshiners are men who operate little unlicensed distilleries in the
fastnesses of the mountains and surreptitiously sell their whiskey
without paying the government tax upon it.
"But why should moonshiners object to our camping in the wood
lands up here and cutting railroad ties?" asked Jim Chenowith. "I
don't see the connection."
"Well, they do," answered Tom. "They are engaged in a criminal
business and they don't want to be watched. If they are caught their
stills and their whiskey are confiscated, they are fined heavily, and
worse still they are imprisoned for very long terms. They are always
on the lookout for agents of the revenue in disguise, and so they
don't want any strangers in this 'land of the sky' on any pretence.
They are desperate men to whom murder is a pastime and
assassination an amusement."
"Then why did you anger the man as you did, Jack, and subject him
to humiliation?" asked Ed Parmly. "Won't it make him and his people
our enemies?"
"No," answered Jack. "They are that already. You remember that
even after hearing my explanation of our purpose in coming up here,
he ordered us to leave the mountain at once. Not being a pack of
cowards of course we're not going to do anything of the kind. So it
was just as well to let him know at once that we're going to stay,
that we are fully armed, and that in the event of necessity we shall
be what he would call 'quick on trigger.' I meant him to understand
that clearly, and he understands it. You see men that are freest in
killing other men have no more fondness than people generally for
being killed themselves. Desperadoes are not heroes. They are
merely bullies who take advantage of an unarmed enemy when they
can and sneak away as that man did whenever an enemy 'gits the
drap' on them as the fellow phrased it."
"But won't they attack us in our camp?" asked Jim Chenowith.
"Probably," answered Jack with perfect calmness. "They want us out
of the mountains and they'll probably try to drive us out. But I for
one am not going to be driven out, and I don't think the rest of you
fellows are Molly Cottontails to be chased down the steeps."
"No!" called out little Tom. "We've got guns and we know how to use
them. We're up here by right and here we'll stay. Won't we boys?"
"Yes! Yes! Yes!" answered the others in chorus.
"All right then," said Jack, "and I thank you all. But now that we
know our danger we must look out for ourselves. We must never
sleep without a sentinel on guard, and every fellow of us must
always sleep with his gun by his side. That's what soldiers call
'sleeping on arms!'"
"All right!" called out Tom, who was always ready. "Arrange the
guard detail for to-night Jack. I'll take the worst turn, which I believe
begins about three o'clock—the 'dog watch' they call it on
steamboats."
"Well," said Jack, meditatively. "It's now nearly ten o'clock. We'll all
be up by six in the morning. That's eight hours and there are five of
us; so it means one hour and thirty-six minutes apiece, of guard
duty."
"Hold on," broke in the Doctor. "You've forgotten me."
"Well you see, Doctor, your health isn't good, and we don't want you
to lose your sleep. We'll do all this guard duty without bothering
you."
"Not if I know it," answered the Doctor. "I didn't join this party as a
dead head, you may be sure of that. I'm going to share and share
alike with you my comrades. I am not yet very strong after my long
illness, but I'm strong enough to stay awake for my fair share of the
time, and you may be sure I am strong enough to pull a trigger and
empty fourteen bullets from my magazine rifle into any body that
may venture to assail us. Now boys, I want you to understand my
position and attitude clearly. Either I am a full member of this
company in good standing, or else I do not belong to it at all. In the
latter case I'll withdraw and go back down the mountain. I'm older
than you boys, but not enough older to make any serious difference.
I'm still a good deal of a boy, and either you must let me do a boy's
part or I'll quit. If I stay with you I must be one of you. I must do
my share of the cooking and all the rest of the work, and especially
my fair share of all guard duty and all fighting, if fighting becomes
necessary at any time. Come now! Is it a bargain? Or am I to quit
your company to-morrow morning, as a man too old and unfit to
share with you the work we have come up the mountain to do?"
"I move," said little Tom, who had more wit than any other member
of the company, "that Doctor LaTrobe be hereby declared to be
precisely sixteen years old, and fully entitled to consider himself a
boy among boys!"
The motion was carried with a shout, and then Jack, who was
always practical, said:
"Well then there are six of us. That means one hour and twenty
minutes apiece of guard duty to-night."
So it was arranged, and as soon as the order in which the several
members of the party should be waked for duty was arranged, the
boys piled an abundance of wood on the fire, wrapped themselves in
their blankets and lay down to sleep. But first little Tom
manufactured a pot of fresh coffee, and set it near the fire where it
would keep hot.
"The sentinel must be wide awake," he said, "and I don't know
anything like good strong coffee to keep one's eyes open."
 CHAPTER II
A Picket Shot
The three Ridsdale boys and their comrades lived in a thriving,
bustling little town in one of the great valleys which divide the
Virginia Mountains into ranges each having its own name. Their ages
ranged from Jack's nineteen years down to Jim Chenowith's sixteen.
Little Tom was so called not so much because he was rather shorter
than his overgrown brothers, as because his father had been also
Thomas Ridsdale and for the sake of distinguishing between them
the family and the neighbors had from his infancy called the boy
"Little Tom." He was next to Jack in age being now nearly eighteen
years old, and as a voracious reader and a singularly keen observer
he was perhaps better informed than any other boy in the party. He
was not really little by any means, being five feet seven inches high
and of unusually stalwart frame. From his tenth year till now he had
spent his vacations mainly in hunting in these mountains. His
knowledge of wood craft and of all that pertains to the chase was
therefore superior even to Jack's.
The father of the Ridsdale boys had been the foremost young lawyer
in the town, but he had died at a comparatively early age, leaving
his widow a very scanty estate with which to bring up the three boys
who were her treasures. The boys had helped from the earliest years
in which they were capable of helping. They had chopped and
sawed and split wood, worked in the hay fields, dropped and
covered corn, pulled fodder and done what ever else there was to do
that might bring a little wage to eke out the good mother's scant
income. In brief they had behaved like the brave, manly, mother-
loving fellows that they were, and they had grown into a sturdy
strength that promised stalwart manhood to all of them.
Among the widow's meagre possessions was a vast tract of almost
worthless timber land up there on the mountain. It was almost
worthless simply because there was no market for the timber that
grew upon it. But now had come the railroad enterprise, whose
contractors wanted ties and bridge timbers and unlimited cordwood
for use in their engine furnaces. So Jack and his brothers had
decided to omit this winter's attendance upon the High school, and
to devote the season to the profitable work of wood chopping on the
mountain. There was an exceedingly steep descent on that side of
the mountain, on which their timber lands lay, so that by building a
short chute to give a headway they could send their railroad ties and
the other products of their chopping by a steep slide to the valley
below by force of gravity and without any hauling whatever. Two of
their schoolmates—Jim Chenowith and Ed Parmly had asked to join
in the expedition. An arrangement had been made with the railroad
people to pay a stipulated price for every railroad tie shot down the
hill, a much higher price for every piece of timber big enough for use
in bridge building and a fair price for all the cordwood sent down the
chute. This latter was to be made of the limbs of trees cut down for
ties or bridge timbers—limbs not large enough for other uses, and
which must otherwise go to waste. The two boys who did not belong
to the Ridsdale family—Ed Parmly and Jim Chenowith—were to pay
to Mrs. Ridsdale a small price agreed upon for each tie or timber, or
cord of wood that they should cut on her land, the rest of the price
going to themselves.
During the last week before their departure Dr. LaTrobe had asked
the privilege of joining the expedition. He was a man of means
whose home was in Baltimore, but who had come to the town in
which the boys lived in search of health and strength. He was a
tireless student of science, and in the course of his duty in one of
the charity hospitals of Baltimore he had contracted a fever. His
recovery from it was so slow and unsatisfactory that he had
abandoned his work and wandered away into South Western Virginia
for purposes of recuperation and had been for some months
boarding with Mrs. Ridsdale. In pursuit of health and strength
therefore he asked to join the Ridsdale boys in their mountain
expedition.
"I have quite all the money I want," he explained, "and so the ties
and timbers and cordwood that I may cut will be counted as your
own. All I want is the life in the open air, the exercise, the freedom,
the health-giving experience of a camping trip."
Thus it was that the party had come together. They knew perfectly
that once in the mountains after winter should set in in earnest their
communication with the country below must be very uncertain. They
therefore, took with them on their own backs and on the backs of
their pack mules those necessaries which would most certainly
render them independent of other sources of supply. The Doctor had
largely directed the selection of food stuffs, bringing to bear upon it
an expert knowledge which the boys, of course, did not possess.
"The basis will be beans," he said.
"But why beans?" asked Jack.
"For several reasons. First, because beans will keep all winter.
Second, because beans are very nearly perfect food for robust
people. They have fat in them, and that makes heat, and they have
starch and gluten in them too, so that they are in fact both meat and
bread. Pound for pound, dried beans are about the most perfect
food possible. To make them palatable we must take some dry
salted pork along. We can carry that better than pickled pork in kegs
and we shall not have to carry a lot of useless brine if we take the
dry salted meat."
The Doctor added some dried beef, a few hams, some bacon and a
supply of sugar.
"Sugar," he explained, "is almost pure nutriment. It is food so
concentrated that it ought never to be taken in large quantities in its
pure state."
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