Categories
Chicago Economists Exam Questions

Chicago. Economic Theory Ph.D. Qualifying Exams, 1932-33

In the papers of economist Albert G. Hart at Columbia University there is a folder that contains nearly a complete run of economic theory qualifying exams from the University of Chicago covering the period 1926-1940. I include here the exam from the Spring quarter 1932 and the exam from the Autumn Quarter 1933, though I cannot say whether Hart himself actually took either one of these two theory exams. The previous two postings have field exams (money and banking exam, economic history exam)  that are (i) unique in his papers and (ii) have his handwritten notations, e.g. questions checked and time started and ended for some questions, so we can be very sure those were indeed “his” exams. In several of the theory exams before the Autumn 1933  there are Hart-like checkmarks over the names of economists explicitly mentioned which has led me to conclude that a part of Hart’s personal examination prep was to go over the old theory examinations to identify the economists most likely to make an appearance in his own economic theory exam. The Autumn 1933 exam of this posting has no such checkmarks and would coincide with the quarter he took his money-and-banking exam. In any event today’s postings are still valuable artifacts from the early 1930s Chicago department.

________________________________

ECONOMIC THEORY
Written Examination for the Ph.D.

Spring Quarter, 1932

Time: 3 1/2 hours.

Answer seven questions, of which at least three must be in Part I. C. & A. students may substitute question 6, Part II, for any other question.

Part I

  1. Discuss the relationships between the conclusions and assumptions of the neoclassical school[✓], the Weber[✓]-Sombart[✓] school, and the American institutionalists[✓].
  2. Trace the development of the demand concept from Adam Smith to the present, touching on the contributions of J.S. Mill[✓], Cournot[✓], Fleeming Jenkin[✓], Walras[✓], Böhm-Bawerk[✓], and the statistical economists. [(Schultz)]
  3. A producer of cement has a monopoly of the market in the area adjoining his plant, but is an insignificant factor in the rest of the country, where there are many competing producers. He can sell any desired portion of his output in the competitive market at the price there prevailing. Given the price prevailing in the competitive market, the demand schedule in his own monopolized market, his own average cost schedule, and any additional information which may be necessary for the solution of the problem, find the price he should charge in his own market, and the quantities he should sell in each market, to maximize his net revenue.
  4. Answer (a) or (b), but not both.

(a) The final degree of utility curves of A and B for corn (X) and beef (Y) are as follows, the small letters x and y representing the quantities of X and Y consumed by the person indicated by the subscript.

Commodity

Person

X (corn)

Y (beef)

A

fa(xa) = – (3/2)xa + (19/2)

?a(ya) = -(1/2)ya + 6

B

fb(xb) = -(3/8)xb + 5

?b(yb) = – yb + 7

The total market supply of corn is

x = xa + xb = 14

and the total market supply of beef is

y = ya + yb = 8

Without performing any numerical computations, explain how to deduce the combined demand curves of A and B for corn in terms of beef and for beef in terms of corn.

(b) Is there an equilibrium price and output when a commodity is produced by two competing monopolists? Discuss this problem touching on the solutions of Cournot[✓], Edgeworth[✓], Amoroso[✓], and Wicksell[✓].

Part II

  1. Describe the history and status of the real cost theory [✓] of value. [Marx]
  2. Point out the resemblances and the differences between the preconceptions, the methods of analysis, and the conclusions, of Adam Smith and the physiocrates [sic], or of the mercantilists and the physiocrates [sic], or of Malthus and Ricardo.
  3. Give some reasonable objectives for a centrally planned economy in a democratic state; state the grounds of your selection of objectives; indicate and discuss possible lines of procedure for realizing them through price control.
  4. Explain and comment on the following in connection with interest theory; [BB; Hayek; Fisher[?]]

(1)  length of the productive period; (2) underestimate of the future; (3) marginal physical productivity of waiting; (4) marginal abstinence; (5) “evening out the income stream.”

5.  Discuss the significant of variability of the proportions of the factors of production and of variability of the supplies of the productive factors for a marginal productivity theory of distribution.

For C. & A. students only

6.   Discuss the feasibility and merits of inflation in the present stage of the depression.

 

Source: Columbia University Libraries, Manuscript Collections. Albert Gailord Hart Collection. Box 60, folder “Exams: Chicago”.

_____________________________________________

ECONOMIC THEORY
Written Examination for the Doctorate

[Part I, Price theory/Microeconomics]
Autumn Quarter, 1933

Time: Three Hours.

Answer all the questions as directed.

1.   (Answer both parts)

A.  Defined or very briefly describe:

(1) Inelastic demand
(2) Elastic demand
(3) Incremental (or marginal) revenue
(4) Perfect competition (in terms of demand elasticity)
(5) Pure profit
(6) Productivity (incremental or marginal of a particular agency or factor)

B.  Is export dumping evidence of domestic monopoly? Explain. Under what conditions does export dumping lead to a lower domestic price in the exporting country?

2.   (Answer either A or B)

A.  State briefly the doctrine of market price and natural price of the early classical economists; contrast this with Marshall’s analysis of long-run and short on price, and give your own view of the correct classification of viewpoints with respect to time.

B. State and critically discuss the classical doctrine of productive and unproductive labor, and in view of the issues raised formulate a correct definition of production in economics.

3.  The theory of marginal utility: its origin, principal forms or interpretations, your own view of its meaning and use in price theory, and the critical appraisal of its validity. Consider especially the relations between the use of the principle as an explanatory concept and as a premise for the discussion of social policy.

4.  (Answer either A or B)

A.  Discuss the effects of establishing by legal action be minimum wage above the wage actually received by, say, one-fourths of the workers actually employed: (a) under conditions of prosperity with approximately full employment; (b) under depression conditions with a large volume of unemployment.

B.  Criticized the view that industry fails to distribute sufficient purchasing power to buy its product, resulting in economic on balance.

5. Show graphically the effect of lowering the tariff on sugar. (Assumed domestic and foreign demand and supply curves given, and neglect any disturbances in the balance of international payments.)

6. Briefly characterize and evaluate comparatively what you considered the significant “approaches” or methodologies in economic science. (The following are to be taken as suggestive catch-words: classical, inductive, institutional, historical, deductive, price theory, sociological, socialistic, control.) We are possible, cite examples of the different tendencies in the history of economic thought from the Greeks to the present.

 

PART II
MONETARY AND CYCLE THEORY

Written Examination for the Ph.D.
Autumn Quarter, 1933

Time: 2 hours

Answer four questions, including the first two.

  1. State the classical doctrine of international gold flows and price levels and discuss some recent criticism of this doctrine.
  2. “The primary cause of business depression is the rigidities of the price structure.”  “Through their alternating contraction and expansion of the circulating medium the banks are responsible for the wide swings in industrial activity.” Discuss these statements.
  3. Discuss the theoretical short-comings involved in a policy on the part of our federal government of progressively bidding up the price of gold in foreign markets.
  4. If business recovery came without the assistance of governmental inflation it would be accompanied by an expansion of the circulating medium as a result of the lending operations of the commercial banks. What significant similarities and differences are there between such expansion and (a) government borrowing from the banks in order to finance public works, (b) outright “greenbackism”?
  5. It has been argued that in as much as the demand for capital goods is a derived demand it follows that any voluntary saving will necessarily result in some degree of unemployment. That is to say, the savings will reduce the demand for consumers’ goods, thus reducing the demand for capital goods, and consequently not all the savings will be borrowed; hence unemployment. But the commercial banks, through their power to create circulating medium, make it possible for entrepreneurs to obtain the funds with which to create capital goods without the reduction in consumer demand which comes with saving. Hence the banks furnish a means of escape from the dilemma. Discuss.

Source: Columbia University Libraries, Manuscript Collections. Albert Gailord Hart Collection. Box 60, folder “Exams: Chicago”.

Image Source:  Social Science Research Building (Lecture Hall 1). University of Chicago Photographic Archive, apf2-07482, Special Collections Research Center, University of Chicago Library.