Cambridge. Economics Tripos Examinations, 1922.

 

Links to economics examinations from the Economics Tripos at Cambridge University for other years:

Economics Tripos 1921.

Economics Tripos 1931.
Economics Tripos 1932.
Economics Tripos 1933.

_________________

PART I

Monday, May 29, 1922. 9—12.
GENERAL ECONOMICS. I.

1. “Ich bestreite nicht den Einfluss der Nachfrage weder auf den Getreidepreis noch auf dem Preis aller andern Dinge; aber das Angebot folgt ihr dicht auf den Fusse, und alsbald erlangt es die Macht, den Preis von sich aus eigenmächtig zu bestimmen, und indem es ihn regelt, ist er durch die Produktionskosten bestimmt.” Comment.
2. “In a sense all rents are scarcity rents, and all rents are differential rents” (Marshall). Comment on this statement.
3. What are the chief social evils resulting from mal-investment of the community’s savings? What are the main causes of such mal-investment?
4. “Profit is the test of service to the consumer.” Consider this defence of the economic motive.
5. “Wages are determined by bargaining strength.”
   “Wages must correspond to the marginal net product of labour.”
   Are these views compatible ?
6. “Whatever may be urged against attempts by the State to fix standard rates of pay, the fixing of maximum hours in all occupations has advantages that must outweigh any possible attendant drawbacks.” Comment.
7. “In view of the heavy burdens of taxation under which British industry must for many years labour, it is inconceivable that we should quickly regain our pre-war position in our trade with those nations that do not suffer from similar handicaps.” Discuss this statement.
8. “The fact that the general level of prices has fallen 40% during a period when the quantity of money has undergone little variation and production has been declining shows that the Quantity Theory provides a very inadequate explanation of the forces governing the general level of prices.” Comment.
9. Discuss the view that the Law of Diminishing Returns is only a special case of a more general law of the combination of factors of production.
10. How is the representative producer defined? Explain the use made of this idea in modern economics.

 

Monday, May 29, 1922. 1½—4½
RECENT ECONOMIC AND GENERAL HISTORY OF THE UNITED KINGDOM AND THE BRITISH EMPIRE.

1. Consider the objects and results of the policy of enclosures in the late eighteenth and the early nineteenth centuries.
2. Sketch the growth of British power in Asia during the Revolutionary and Napoleonic Wars.
3. Discuss the causes of social unrest in England in the years immediately following the peace of 1815.
4. “The accession of Queen Victoria coincided with serious troubles in our oversea dominions.” Explain what these were. Do you consider that they had any common cause?
5. What were the principal causes of the expansion of British trade and industry between 1828 and 1853?
6. Explain the causes of the flow of emigrants from the United Kingdom during the latter half of the nineteenth century and indicate to what extent the emigrants have gone to other parts of the British Empire.
7. Consider the relative importance of the agricultural and the pastoral industries in the development of Canada and Australia.
8. Discuss the influence of the gold discoveries in the Transvaal on the economic and political development of South Africa.
9. “Between 1830 and 1880 British Labour turned from political to economic methods.” Explain the reasons for this and sketch the progress of the Labour movement in the United Kingdom in the period 1880-1914.
10. To what extent did the great industries of England become localised during the nineteenth century? Explain the reasons for the localisation in each case.

 

Tuesday, May 30, 1922. 9—12.
SUBJECTS FOR AN ESSAY.

1. The future of the world’s shipping industry.
2. Subject races, mandates and protectorates.
3. Modern applications of psychology to the study of industrial conditions.
4. “The experiment of free government is not one which can be tried once for all. Every nation and every generation must try it for itself.”
5. The economic transition in India.
6. London as a financial centre.

 

Tuesday, May 30, 1922. 1½ — 4½.
RECENT ECONOMIC AND GENERAL HISTORY OF EUROPE AND THE UNITED STATES.

1. “Napoleon suppressed the political and maintained the social and economic results of the Revolution in France.” Discuss this statement.
2. Sketch the history of American political parties down to the formation of the Republican Party in 1854.
3. “The long peace which Europe enjoyed after 1815 was due to the justice of the settlement made at Vienna.” Discuss this opinion.
4. Account for the rapid spread of settlement over the Mississippi Valley.
5. Compare the progress made in railway construction in France and Germany down to 1870 and the principles on which each country acted.
6. What influence had economic forces on the causes and the result of the American Civil War?
7. “Que devenait la question des compensations? C’est ce que tout le monde se demandait dans notre pays, où l’on jugeait avec raison l’équilibre européen et les intérêts de la France compromis par le subit et énorme accroissement de la puissance prussienne. C’était bien l’avis de Napoléon III.”
   Explain the position of France at this juncture. By what means and with what success did Napoleon III endeavour to improve it?
8. “Kurz, wenn ich in der Wahl zwischen dem russischen und dem österreichischen Bündniss das letzte vorgezogen habe, so bin ich keineswegs blind gewesen gegen die Zweifel, welche die Wahl erschwerten.”
   Discuss the problem of German foreign policy here indicated. In what manner did Bismarck deal with it?
9. Compare the industrial development of Germany and the United States since 1880.
10. “America’s foreign policy is summed up in the Monroe Doctrine.” Examine the truth of this statement as applied to the period since 1865.
11. “The mutual suspicion of England and Russia was always the most serious part of the Balkan problem.” Discuss this opinion.

 

Wednesday, May 31, 1922. 9—12.
GENERAL ECONOMICS. II.

1. Give a formula for measuring elasticity of demand. Consider the meaning of unit elasticity, and test it by an example.
2. What are external economies? Consider the relations of a business to (a) its locality, (b) its industry, (c) general national conditions.
3. What is theoretically included in the National Dividend? Show the difficulties of avoiding leakage and double counting.
4. Discuss the statement that “the standard of life is the standard of activities adjusted to wants.”
5. Discuss the relation of mobility of labour to the problem of unemployment.
6. Describe critically any two types of sliding scale as methods of payment of wages.
7. “The shareholders’ ultimate control is based upon the fact that they bear the financial risk of the concern.” Consider this justification of the existing control of industry.
8. “Si vraiment l’évolution industrielle conduit aux monopoles, il est clair qu’elle conduit aussi à l’établissement du socialisme intégral. Lorsque toutes les industries auront subi la transformation annoncée comme necessaire, lorsqu’elles n’auront plus qu’une tête, lorsque la concurrence aura partout disparu, il sera logique et fatal qu’elles soient nationalisées. ” Consider this view.
9. What are the chief sources of demand for foreign bills? Under what conditions is each form of demand most active?
10. On what principles should bank loans be regulated (a) in a period of rising prices, (b) in a period of crisis?

 

Thursday, June 1, 1922. 9—12.
GENERAL ECONOMICS. III.

1. Discuss the extent to which the future development of Economic knowledge is dependent upon either (a) mathematical methods, or (b) statistical investigations.
2. To what extent is modern advertising an economic waste?
3. Explain one form of the theory of “overproduction” and discuss its validity.
4. Discuss the merits, limitations and social potentialities of Profit Sharing.
5. Explain the process of dealing in futures in any produce market and give some details.
6. Discuss the alleged advantages of “devaluation” at the present time.
7. Discuss the economic problems that have arisen through the accumulation of gold in the United States.
8. What use can properly be made of banking statistics in judging the extent to which inflation or deflation is proceeding?
9. What is the relation between the burden of the National Debt and the National Income in the immediate future?
10. Discuss the modern tendency to use taxation as an instrument for modifying the distribution of wealth.

 

PART II

Monday, May 29, 1922. 9—12.
ECONOMIC PRINCIPLES.

1. “Der Tausch ist, obgleich historisch älter als Ein- und Verkauf, in mancher Beziehung verwickelter.” Explain and elaborate.
2. “Le fait est que l’abondance ou la rareté de l’argent, de la monnaie, ou de tout ce qui en tient lieu n’influe pas du tout sur le taux de l’intérêt, pas plus que l’abondance ou la rareté de la cannelle, du froment, ou des étoffes de soie.” Comment.
3. How far can a policy of emigration be regarded as a remedy for unemployment?
4. “There is no essential difference between domestic and international trade, and consequently no place for any special theory regarding the latter.” Discuss this statement.
5. Examine the possible effects of inventions upon the economic rent of land.
6. “A controlling influence over the relatively quick movements of supply price during short periods is exercised by causes in the background which range over a long period.” Indicate some of the ways in which such an influence may be exercised; and examine the general significance of the above proposition.
7. Do you consider that it would be good policy for a country like Great Britain to discourage the export of capital?
8. “The problems of distribution and exchange are so closely connected that it is doubtful whether anything is to be gained by the attempt to keep them separate.” Discuss this statement.
9. Examine critically the assistance given to economic analysis by the method of classifying industries under the headings of (a) decreasing, (b) constant, (c) increasing returns.
10. “Now the quantity of wealth abstained from is gauged by its value; and its value depends on its cost of production. If, then, we introduce abstinence as an element in determining value, and value as a factor in the measure of abstinence, we are clearly guilty of using the thing to be measured as part and parcel of our standard for measuring it.” Comment.

 

Monday, May 29, 1922. 1.30—4.30.
ECONOMIC FUNCTIONS OF GOVERNMENT.

1. State, in its most plausible form, the principle of minimum sacrifice in relation to taxation, and consider its practical application. Is there a corresponding principle of maximum benefit, which is applicable to public expenditure?
2. Is it desirable to subsidise from public funds (a) housing, (b) postal services, (c) University education?
3. Examine the nature of the real burden of a public debt. For what purposes and within what limits is it legitimate to borrow in order to meet public expenditure?
4. Examine the special arguments in favour of protective duties on imports from countries with depreciated foreign exchanges.
5. “Expenditure on armaments is economic waste.” “The services of soldiers and sailors form part of the national dividend, no less than the services of policemen, plumbers and physicians.” Discuss these statements.
6. Discuss the possibility of taxing a monopolist in such a way as to induce him to lower his selling price, and consider the practical difficulties in the way of making such a policy effective.
7. “The removal of taxes on articles of working-class consumption will enable employers to reduce wages and will, therefore, benefit employers and not workmen.” Examine this view, distinguishing between cases where wages (a) are, and (b) are not, paid on a cost-of-living sliding-scale.
8. In most countries, the State regulates the employment of women and children in industry more extensively and more stringently than that of men. Can this discrimination be justified on economic grounds? Consider separately the regulation of (a) wages, (b) hours, (c) working conditions.
9. “Contrairement à ce qui se passe en Prusse, où la régie des chemins de fer, instrument fiscal, verse ses produits dans la caisse de l’Etat, en Suisse la régie garde pour elle ses bénéfices, de même qu’elle supporte les pertes, s’il s’en présente.” Which of these two arrangements do you consider the better, and why?
10. “Eine gleichmässige Wertsteuer von allen wirtschaftlichen Gütern, oder was dasselbe heisst, eine Steuer auf den Aufwand, ist von vornherein die beste Steuer, denn sie leitet den Aufwand der Individuen nicht aus seinen natürlichen Kanälen.” Comment

 

Tuesday, May 30, 1922. 9—12.
MONEY, CREDIT AND PRICES.

1. Discuss the influence exerted upon the general level of prices by a change in the amount of credit granted by manufacturers and traders to their customers. Would you treat trade- credit as “money” in expounding the Quantity Theory?
2. “No bank can lend more money than is deposited with it.” Examine this statement and, in particular, its bearing upon the power of banks to increase the supply of money.
3. Enumerate the principal items in the “Floating Debt” of the British exchequer. Would the general level of prices be either lowered or made steadier if a large part of this debt were (a) converted into long-term loans, (b) paid off out of taxation? Support your conclusions by arguments or evidence.
4. Compare the present position of the Bank of England in the London money market with its position before the war, paying special attention to its power of controlling credit. Are the changes which have occurred likely to be permanent?
5. How would you construct an index-number of prices to be used in testing the view that the foreign exchanges tend towards “purchasing-power parity”? Should such an index- number differ from one designed to measure the changes in expenditure necessary to enable a particular class of people in a particular country to purchase the same “standard of comfort” at different dates?
6. Discuss the practicability of stabilising the price-level by currency regulation. Would this make for stability of trade?
7. Compare the situation which developed in the London money market in August 1914 and the measures which were taken to meet it with the corresponding features of previous crises.
8. Examine the causes which influence the day-by-day rate in the London money market, and discuss its relation with the Bank Rate.
9. What were the principal respects in which the pre-war banking systems (a) of the United States, (b) of Germany differed from that of Great Britain?

 

Tuesday, May 30, 1922. 1.30—4.30.
DISTRIBUTION AND LABOUR.

1. In several recent arrangements for changes in wages equal weekly amounts, instead of pro rata amounts, have been added or subtracted over a wide range of districts and occupations within an industry. Discuss the effect of this on the supply of labour to districts and occupations.
2. Describe any one of the existing scales connecting wages to the index-number of Cost of Living. Discuss the view that these scales eliminate the variability in the purchasing power of currency and so facilitate wage-bargaining in relation to other factors.
3. To what extent could industry accommodate itself to fluctuations of demand if there was no reserve of labour and if no overtime was worked? Is there any economic justification for paying higher rates of wages for overtime?
4. Under what circumstances is the argument for a legal minimum wage strongest? Why in fact does the minimum continue in coal-mining while it is abolished in agriculture?
5. How far does the classification of income by economic categories (arising from capital, enterprise, labour, etc.) correspond to a classification by persons? What were the sources and nature of information before the war about incomes of persons and how far are these sources still available?
6. Distinguish between co-partnership and profit-sharing. Why are these methods commonly disliked by organised labour?
7. Consider the advantages and disadvantages of bonus systems of wage payment, giving examples of such systems.
8. In what way and to what extent does the provision of friendly benefits by a trade-union affect its bargaining power? Why do some unions provide large friendly benefits and others scarcely any?
9. “The theory that people tend to receive as their remuneration the marginal net product of their services amounts, when analysed, to no more than that they tend to get what they tend to get.” How far is this criticism justified?

 

Wednesday, May 31, 1922. 9—12.
STRUCTURE AND PROBLEMS OF MODERN INDUSTRY.

1. Examine the claims of industrial combinations to promote industrial stability.
2. “There are few who do more to increase the efficiency of labour in creating material wealth than an able and upright company promoter.” Comment.
3. To what principal causes would you attribute British predominance in the shipping trade during the last half century? Analyse the influence on British shipping of the country’s Free Trade policy.
4. How would you expect a great development in the means of transport and communication to affect the localisation of industry?
5. In what types of industry is there (a) the strongest, (b) the weakest case for the ownership or control of industry by the State?
6. To what extent is the large amount of time and money devoted by many manufacturers to advertisement, and selling organisation generally, evidence (a) of the existence of “increasing returns,” (b) of the wastefulness of competition?
7. Discuss the probable limits to the future growth of the British co-operative movement. How might the question be affected by a marked change in the distribution of income?
8. Consider and weigh against one another the arguments for and against greater publicity regarding business profits.
9. “The necessity that those who bear the risks should exercise the control bars out all projects for workers’ control of industry.” “Workers’ control of industry is justifiable on the ground that they alone bear the risks of unemployment, accident and fluctuating wages.” Discuss these statements.

 

Wednesday, May 31, 1922. 1.30—4.30.
SUBJECTS FOR AN ESSAY.

1. “Nothing is true in theory which is not also true in practice.”
2. The relation of economics to ethics.
3. The prospects of the League of Nations.
4. Free Trade.
5. Population — quantity and quality.
6. “For each age is a dream that is dying,
   Or one that is coming to birth.”

 

Thursday, June 1, 1922. 9—12.
MISCELLANEOUS ECONOMIC QUESTIONS.

1. “The assertion that unemployment is due to German reparations must mean that, owing to reparations, German goods are flooding our markets to a far greater extent than before the war. In fact, the proportion of such goods brought to this country last year was only one-quarter of what it was before the war.” Mr Bonar Law in the House of Commons. Comment.
2. Distinguish the more important forms of economic pro vision for the future. Do you consider that the provision normally made in modern societies, under any of these forms, is either markedly excessive or markedly inadequate?
3. The national capital may be estimated either by capitalising income or by multiplying the value of estates passing by death in a year by an appropriate factor; the latter method yields the smaller result. Can the discrepancy be explained by differences in definition of national capital?
4. Distinguish the various types of inheritance tax which are, or might reasonably be imposed in modern communities, and compare their economic effects.
5. Distinguish the chief causes of trade fluctuations in this country since 1918, and estimate their comparative importance.
6. Show how the conception of the elasticity of demand as applied to an individual’s desire for income throws light upon (a) the effect of changes in wage-rates upon output, (b) the effect of taxation upon enterprise and saving.
7. Discuss the more important conclusions which may be drawn from recent enquiries into industrial fatigue.
8. “Reduction of wages causes reduction in purchasing power and therefore results in decreased rather than in increased employment.” Is there any element of truth in this statement?
9. Is it reasonable that the cost of roads should fall mainly on the community and the cost of railroads on the users thereof?

 

Thursday, June 1, 1922. 1.30—4.30.
THE THEORY OF STATISTICS.

1. How far does the precision of measurement of prices by index-numbers depend (a) on the theory of sampling, (b) on the theory of weighted averages? In your answer distinguish between the purposes for which such numbers are used.
2. Discuss what system of averages, measurements of dispersion, etc. is best suited for comparing two wage groups, such as follows:

Wages of men working full time for a week in 1906
	Cotton Industry	Woollen and Worsted Industry
Under 15/-	19	18
15/- ____	141	134
20/- ____	244	316
25/- ____	193	206
30/- ____	126	197
35/- ____	87	65
40/- ____	86	31
45/- ____	58	10
50/- ____	31	8
55/- ____	10	3
60/- ____	3	6
65/- and above	2	6
	1000	1000

Without doing the complete arithmetical work, show the method of calculation for the system you prefer.

3. are the second, third and fourth moments about the average of a frequency group containing an indefinitely great number of quantities. A variable y is formed by selecting two quantities from the group independently and adding them. M₂, M₃, M₄ are the moments about its average of the frequency distribution of y.

Show that , and .

Assuming, that y is formed by the addition of n (instead of 2) quantities then , show that when n is great the frequency curve of y satisfies the conditions for Type VII (the normal curve) in Professor Pearson’s system.

4. Show that Pareto’s Law for the distribution of incomes, , where N is the number of incomes above x units, and A and are constants, leads to the law “average of incomes above x varies directly as x.”
   Test graphically and otherwise whether Pareto’s law is satisfied by the following figures and estimate roughly the value of .

Number of Persons Assessed to Super-Tax, 1916-17
Income		Number
Exceeding	Not exceeding
£	£
3000	5000	16,065
5000	10,000	10,306
10,000	50,000	5272
50,000	100,000	239
100,000	___	103
		31,98

 

5. Newton’s interpolation formula may be written

State on what hypothesis it rests, and illustrate its use by estimating the number of wage-earners between 30/- and 32/- in the Cotton Industry (Question 2), using only the four entries 244, 193, 126, 87.

6. Explain the terms “crude death-rate,” “standardised death-rate,” “correcting factor.”
   Give an account of the two methods in use for removing the local variations in age distribution which vitiate the utility of the crude death-rate and consider whether they may be expected to give approximately the same result.
7. Under what conditions may a regression locus be expected to be approximately rectilinear?
   Estimate the correlation coefficient between girth and height from the following data:

Height inches	Number of instances	Average girth
60	2	32.7
61	7	33.6
62	9	33.5
63	14	34.2
64	18	34.1
65	14	34.7
66	14	34.7
67	12	35.0
68	10	35.1
69	7	35.5
70	3	36.3
	110

Height: average 65.6, standard deviation 2.52.
Girth : average 34.5, standard deviation 1.66.

8. The notation used in connection with the Life Table (stationary population) is based on successive values of l_x, the number of persons who reach the precise age of x.

Express the central death-rate (m_x), the force of mortality (), and the complete expectation of life in terms of these values.

Show that , if the line representing survivals is regarded as straight in the neighbourhood of x.

9. “Bernoulli’s Theorem exhibits algebraical rather than logical insight.” Comment.

Source:  Economics Tripos Papers, 1921-1926, pp. 21-36.

Image Source: Cambridge University, St. John’s Library from website Vintage Postcards.