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Exam Questions Harvard

Harvard. Final exam questions for commercial crises. Persons, 1925

 

 

Warren Milton Persons (1878-1937) received his S.B. from the University of Wisconsin and Ph.D. from University of Wisconsin in 1916. His major professor was Richard T. Ely and his thesis had the title: “The Variability in the Distribution of Wealth and Income”. An obituary was written for the Journal of the American Statistical Association (Vol. 34, No. 206: June, 1939, pp. 411-415) by William Truant Foster.

Earlier posts in Economics in the Rear-view Mirror for the Harvard course Economics 37:

Reading list for Commercial Crises taught by Persons 1923,
Examination questions for Commercial Crises taught by Persons 1924.

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Course Description

[Economics] 37 1hf. Commercial Crises. Half-course(first half-year). Tu., Th., Sat., at 9, or by arrangement.Professor Persons.

The history, literature, and theories of economic prosperity, crises, and depression, with special reference to the problem of forecasting.
An analysis from the point of view of business cycles of the statistics of speculation, prices, production, trade, interest rates, money and banking.

 Source: Division of History, Government, and Economics 1924-25, Official Register of Harvard University, Vol. XXI, No. 22 (April 30, 1925), p. 74.

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Course Enrollment

[Economics] 37 1hf. Professor Persons.—Commercial Crises.

Total 16: 9 Graduates, 1 Senior, 1 Junior, 3 Radcliffe, 2 Others.

Source:Harvard University. Report of the President of Harvard College, 1924-1925, p. 76.

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1924-25
HARVARD UNIVERSITY
ECONOMICS 371

  1. ….a.   List, in order of severity of disturbance, the years of crisis, or beginning of marked business recession in the United States since 1837.
    1. Discuss your criteria for “severity of disturbance” and designate the years of crisis.
  2. Outline and discuss briefly the method of construction of the Harvard Index of General Business Conditions.
  3. What positions or movements of the constituent curves of the Index forecast business (a) revival from depression, (b) prosperity, (c) crisis, and (d) recession or depression? Discuss.
  4. Discuss with reference to business cycles:
    ….a.   Commodity prices and their interrelations.

    1. The volume of production of manufactures and mining.
    2. The volume of production of agriculture.
    3. Short-time interest rates.

In your discussion describe the general nature of the data available and indicate their significance.

  1. ….a.  Classify according to any scheme you please the theories of Veblen, Hobson, Aftalion, Bouniatian, Hawtrey, Robertson, Mitchell, Moore, and others.
    1. Discuss your classification.
    2. Outline, compare, and criticize the theories of any two of the writers.

Final. 1925.

 

Source:  Harvard University Archives. Examination Papers, Finals, 1925. (HUC 7000.28, vol. 67). Papers Printed for Final Examinations. History of Science, History, …, Economics, …, Anthropology, Military Science.

Image Source:  ProfessorWarren M. Persons in Harvard Class Album 1920.

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Exam Questions Harvard

Harvard. Exams for History and Literature of Economics. Schumpeter, 1942-48.

 

Joseph Schumpeter offered his graduate course “History and Literature of Economics since 1776” nine times during the period 1940-1949. The core readings were basically unchanged. In an earlier post I provided the reading list  for 1939-40 along with examinations from the 1939-40 and 1940-41 academic years. The reading list, complete with links to every item, for 1948-49 has also been transcribed and posted.

In this post you will find transcriptions of final examination questions for five of the remaining seven years in the series.

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Final Examination, 1941-42
HARVARD UNIVERSITY
ECONOMICS 113b2

One question may be omitted. Arrange your answers in the order of the questions.

  1. Economists of the most varied types have claimed Adam Smith as patron-saint. How would you describe his general method as revealed in the five books of the Wealth of nations?
  2. If you felt called upon to defend Ricardo’s theory of value, how would you do it?
  3. Marx predicted the breakdown of the capitalist system. What was his main line of argument? Do you think that the course of events in the last decade has verified his theory?
  4. Explain the meaning and use of the theorem usually referred to as Say’s Law.
  5. Senior defined cost of production as the sum of labor and abstinence necessary for production. Do you think this satisfactory?
  6. Does Marshall’s work seem to you to close or to begin a period in the history of economic thought?

 

Source:Harvard University Archives. Final Examinations, 1853-2001 (HUC 7000.28) Box 6, Papers Printed for Final Examinations—History, History of Religions, …, Economics, …, Military Science, Naval Science. June 1942.

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Final Examination, 1942-43
HARVARD UNIVERSITY
ECONOMICS 113b2

Answer any four out of the following five questions.

  1. With the possible exception of Darwin’s Origin of Species, no scientific book has ever equaled the success of the Wealth of Nations. How do you account for this success?
  2. Discuss the Malthusian theory of population and describe its role in the classical system of economic theory.
  3. What do you think of the so-called Ricardian theory of rent?
  4. Criticize the following statement made by Adam Smith: “The price of monopoly is upon every occasion the highest which can be got. The natural price, or the price of free competition, on the contrary, is the lowest which can be taken…for any considerable time.”
  5. The founders of the marginal-utility school evidently believed that they had revolutionized economic theory. What warrant was there for this belief? What do you think their contribution consisted in?

 

Source:Harvard University Archives. Final Examinations, 1853-2001 (HUC 7000.28) Box 7, Papers Printed for Final Examinations—History, History of Religions, …, Economics, …, Military Science, Naval Science. May 1943.

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Final Examination, 1943-44
[not (yet) located]

Course not offered 1944-45

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Final Examination, 1945-46
HARVARD UNIVERSITY
ECONOMICS 113b

Two questions may be omitted. Arrange your answers in the order of the questions.

  1. Explain the meaning and use of “Say’s Law.”
  2. Sketch the history and discuss the merits and demerits of the wage-fund theory.
  3. How did Ricardo explain “profits?”
  4. Choose any economist between 1776 and 1890 with whose work you are familiar, and describe the nature, method, and value of his contribution.
  5. Smith no doubt sponsored what Lord Keynes described as the Fallacy of Cheapness and Plenty. What do you think of the proposition involved?
  6. What relation do you conceive to exist between economists’ theoretical explanations of facts and (a) their political preferences in general and (b) the interests of the social classes to which they belong in particular?

 

Source:Harvard University Archives. Final Examinations, 1853-2001 (HUC 7000.28) Box 11, Papers Printed for Final Examinations—History, Government, Economics, …, Military Science, Naval Science. May 1946.

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Final Examination, 1946-47
HARVARD UNIVERSITY
ECONOMICS 113b

One question may be omitted. Arrange your answers in the order of the questions.

  1. Characterize briefly the nature, and the historical roots, of Adam Smith’s performance.
  2. What was the contribution of Ricardo to economics? And what of it may be said to have survived until today?
  3. State and criticize the various explanations that the English classics offered for what they took to be an indubitable tendency in the rate of profits to fall?
  4. Appraise the role, in the history of economic theory, of Malthus’s Law of Population?
  5. Discuss the validity and the importance of the marginal-utility theory of value.
  6. What do you mean by, and what do you think of, Institutionalism?

 

Source:Harvard University Archives. Final Examinations, 1853-2001 (HUC 7000.28) Box 14, Papers Printed for Final Examinations—History, History of Religions, …, Economics, …, Military Science, Naval Science. May 1947.

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Final Examination, 1947-48
HARVARD UNIVERSITY
ECONOMICS 113b

One question may be omitted. Arrange your answers in the order of the questions.

  1. Discuss the nature and importance of Ricardo’s contributions to economic theory.
  2. Discuss the nature and importance of Senior’s contributions to economic theory.
  3. “Demand for commodities is not demand for labor.” Explain and criticize.
  4. State and analyze the Ricardian theory of Rent.
  5. State and analyze Say’s “Law of Markets.”
  6. Most English classics were votaries of Laissez-faire. What qualifications did they admit, particularly with reference to the labor contract?

 

Source:Harvard University Archives. Final Examinations, 1853-2001 (HUC 7000.28) Box 15, Papers Printed for Final Examinations—History, History of Religions, …, Economics, …, Military Science, Naval Science. May 1948.

_____________

Final Examination, 1948-49
[not (yet) located]

_____________

Image Source: Selection from “Joseph A. Schumpeter and other at dinner table, ca. 1945”, Harvard University Archives HUGBS 276.90p (4).

 

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Exam Questions Harvard

Harvard. Exams on Adam Smith, J.S. Mill and Modern Writers. Taussig, 1915, 1916.

 

Frank W. Taussig only offered this intermediate level economic theory course twice. It was sandwiched in between his principles of economics course and the graduate economic theory course.

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Course Description, 1917-18
[Note: the course was not offered, 1917-18]

7a 1hf. Economic Theory [No instructor listed]. Half-course (first half-year). Tu., Th., at 2.30, and (at the pleasure of the instructor) Sat., at 11.

Course 7a undertakes a survey of economic thought from Adam Smith to the present time. Considerable parts of the Wealth of Nations and of J. S. Mill’s Principles of Political Economy will be read, as well as selected passages from the writings of contemporary economists. No theses or other set written work will be required. The course will be conducted chiefly by discussion. It forms an advantageous introduction to Economics 7b [“The Single Tax, Socialism, Anarchism” taught by Professor Thomas N. Carver].
Students who have attained in economics A a grade sufficient for distinction (A or B) are admitted without further inquiry. Others must secure the consent of the instructor.

 

Source:   Division of History, Government, and Economics 1917-18. Official Register of Harvard University. Vol. 14, No. 25 (May 18, 1917) p. 62.

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Course Announcement, 1915-16

[Economics] 7a 1hf. Economic Theory

Adam Smith, J. S. Mill, modern writers. Half-course (first half-year) Tu., Th., at 2.30, and (at the pleasure of the instructor) Sat., at 11. Professor Taussig.

 

Source:Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences 1915-16 (2ndedition). Official Register of Harvard University, Vol. 12, No. 1, Part 13 (September 20, 1915), p. 101.

 

Course Enrollment, 1915-16

7a 1hf.Professor Taussig.—Economic Theory.

Total 27: 12 Graduates, 5 Seniors, 5 Juniors, 1 Sophomore, 4 Others.

 

Source:  Harvard University. Report of the President of Harvard College 1915-1916, p. 60.

 

Final Examination 1915-16
ECONOMICS 7a1

Arrange your answers strictly in the order of the questions.

  1. “The wages of the inferior classes of workmen, I have endeavored to show in the first book, are everywhere necessarily regulated by two different circumstances: the demand for labor, and the ordinary or average price for provisions. The demand for labor, according as it happens to be either increasing, stationary, or declining, or to require an increasing, stationary or declining population, regulates the subsistence of the laborer and determines in what degree it shall be either liberal, moderate, or scanty.”
    Explain (1) in what way Adam Smith analyzed the “demand for labor”; (2) the nature of the reasoning which led to his conclusions regarding the influence on wages of increasing or declining national wealth.
  2. Explain in what way J. S. Mill analyzed the demand for labor, and wherein his analysis resembled Adam Smith’s, wherein it differed; and consider whether Mill’s conclusions regarding the influence of increasing national wealth on wages were similar to Adam Smith’s.
  3. Explain:
    1. The Physiocratic notion concerning productive labor;
    2. Adam Smith’s distinction between productive and unproductive labor;
    3. Adam Smith’s doctrine as to the way in which equal capitals employed in agriculture, in manufactures, in wholesale or retail trade, put in motion different quantities of productive labor.
      What reasoning led Adam Smith to arrange industries in the order of productiveness indicated in (c) and what have you to say in comment on it?
  4. Why, according to Adam Smith, is there rent from land used for growing grain? from land used for pasture? from mines?
    What would a writer like Mill say of these doctrines of Adam Smith’s?
  5. How does Mill (following Chalmers) explain the rapid recovery of countries devastated by war? Do you think the explanation sound?
  6. Wherein is Mill’s analysis of the causes of differences in wages similar to Adam Smith’s, wherein different?
  7. What, according to Mill, is the foundation of private property? What corollaries does he draw as regards inheritance and bequest? What is your instructor’s view on the justification of inheritance and bequest?
  8. Explain wherein there are or are not ” human costs ” in the savings of the rich, of the middle classes, and of the poor; and wherein there are or are not” economic costs ” in these several savings.
  9. Hobson says: (a) that” the traditional habits of ostentatious waste and conspicuous leisure . . . induce futile extravagance in expenditure”; (b) that” the very type of this expenditure is a display of fireworks; futility is of its essence”; (c) that “the glory of the successful sportsman is due to the fact that his deeds are futile. And this conspicuous futility is at the root of the matter. The fact that he can give time, energy, and money to sport testifies to his possession of independent means.” Consider what is meant by” futility ” in these passages; and give your own opinion on the significance of “sport.” [J.A. Hobson, Work and Wealth: A Human Valuation, 1914.]
  10. Explain the grounds on which Hobson finds little promise for the future in (a) consumers’ cooperation; (b) producers’ cooperation; (c) syndicalism.

 

Source: Papers Set for Final Examinations on History, History of Religions,…, Economics,…, Fine Arts, Music in Harvard College. June, 1916, pp. 55-56.

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Course Enrollment, 1916-17

7a 1hf.Professor Taussig.—Economic Theory.

Total 31: 2 Graduates, 13 Seniors, 12 Juniors, , 4 Others.

Source:  Harvard University. Report of the President of Harvard College 1916-1917, p. 56.

 

Final Examination 1916-17
ECONOMICS 7a1

Arrange your answers strictly in the order of the questions.

  1. Summarize the order in which Adam Smith arranges the several topics taken up by him in Book I; and explain the circumstances in his life and in the composition of the Wealth of Nations which explain this order.
  2. Wherein is Adam Smith’s discussion of differences of profit similar to Mill’s, wherein dissimilar?
  3. Precisely in what ways was Adam Smith’s doctrine on the rent of mines similar to that of Mill, in what ways dissimilar?
  4. How, according to Adam Smith, does the issue of paper money drive specie out of circulation?
  5. Can J. S. Mill’s doctrines on wages be reconciled with those of his chapter on the future of the laboring classes?
  6. Explain briefly what Wells means by “administrative” socialism; by “constructive” socialism.
  7. “The principle which prompts to save is the desire of bettering our condition, a desire which, though generally calm and dispassionate, comes with us from the womb, and never leaves us till we go into the grave….An augmentation of fortune is the means by which the greater part of men propose and wish to better their condition.” What application does Adam Smith make of this principle as regards the effects of public and of private prodigality and misconduct?
  8. What is said of Adam Smith’s principle (as stated in the preceding question) by Wells? by your instructor?
  9. “The fact must be insisted upon that most of the work of the world and all the good work is done to-day for some other motive than gain; that profit-seeking not only is not the moving power of the world, but that it cannot be, that it runs counter to the doing of effectual work in every department of life.” [H. G. Wells, New Worlds for Old (1913), p. 94]
    “The prosperous merchant of to-day would find himself somewhere high in the hierarchy of the distributing service….And you would get a pretty good salary; modern Socialism does not propose to maintain any dead level to the detriment of able men. Modern socialism has cleared itself of that jealous hatred of prosperity that was once a part of class-war socialism.” [H. G. Wells, New Worlds for Old (1913), p. 304]
    Is there any inconsistency between these two passages?
  10. “Another delusion is that public property is more serviceable than private property, to the public. It is difficult for some people to see that all productive property is serving the public, and the more efficiently it is managed, and the more it is made to produce for the manager, the better it is for the public…The only question is, is it likely to be used as productively in the hands of the individual who has shown the efficiency to accumulate it, as it would be if it were taken out of his hands by the public?”
    1. What parts of this quotation would Wells accept or reject?
    2. What is your own opinion of the quotation, and of Wells’ view on the subject?

 

Source:  Harvard University Archives. Examination Papers, 1917 (HUC 7000.28, vol. 59). Papers Set for Final Examinations on History, History of Religions,…, Economics,…, Fine Arts, Music in Harvard College. June, 1917, pp. 57-58.

Image Source: Frank W. Taussig from Harvard Class Album 1915.

 

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Exam Questions Harvard

Harvard. Final exams for historical sociology. Anderson, 1917-18

 

Exams for the first term of the two term sequence of sociology (“Analytical Sociology) were transcribed for the previous post. 

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Course Description 1916-17

[Economics] 18b 2hf. Historical Sociology. Half-course (second half-year). Tu., Th., and (at the pleasure of the instructor) Sat., at 2.30. Asst. Professor Anderson.

            The course will involve a study of the literature of social origins and of later stages of social evolution, with particular emphasis on those parts of social history which contribute most to the explanation of the ethnic composition, institutions, and culture of contemporary society. Instruction will be by discussion, reports, and lectures.

Source:   Division of History, Government, and Economics 1917-18. Official Register of Harvard University. Vol. 14, No. 25 (May 18, 1917) p. 65.

 ________________

Course Enrollment, 1916-17

[Economics] 18b 2hf. Assistant Professor Anderson —Historical Sociology.

Total 9: 6 Graduates, 1 Junior, 2 Others.

Source:Harvard University. Report of the President of Harvard College 1916-17, p. 57.

 

Final Examination, 1916-17
ECONOMICS 18b2

  1. Make a critical bibliography for the special field you studied.
  2. What are the main types of theory concerning the origins of religion?
  3. Summarize Giddings’ “philosophy of history,” and show its relation to the views of Hegel, Comte, and Spencer.
  4. What problems are involved in the relation of the clan to the horde?
  5. Summarize the description of Australian marriage given by Spencer and Gillan, and indicate its bearing on the theory of primitive promiscuity.
  6. What are the main steps in the evolution of law?
  7. What is John Dewey’s view of the mind of the savage? What criticisms does Dewey make of Spencer?
  8. Give an account of the Australian initiation ceremony. What are its social functions? What agencies perform those functions in an American village?

Source:  Harvard University Archives. Examination Papers 1917 (HUC 7000.28, vol. 59). Papers Set for Final Examinations on History, History of Religions,…, Economics,…, Fine Arts, Music in Harvard College. June, 1917,p. 65.

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 Course Enrollment, 1917-18

[Economics] 18b 2hf. Assistant Professor Anderson —Historical Sociology.

Total 3: 3 Juniors.

Source:Harvard University. Report of the President of Harvard College 1917-18, p. 54.

 

Final Examination, 1917-18
ECONOMICS 18b2

  1. Discuss the relation of the clan and the horde.
  2. Trace the main steps in the evolution of law.
  3. Discuss Spencer’s view of the mind of primitive man.
  4. What reading did you do on the special topic assigned you? Give critical estimates of the different books and articles.
  5. What evidences can be found for a metronymic system preceding the patronymic system among the Jews and the peoples of Western Europe?
  6. What are the main differences in social organization of the metronymic type and the patronymic type?
  7. Describe the Australian initiation ceremony. How many of our modern educational problems find solution in the educational system of the Australians?
  8. Outline the main stages of social evolution as developed by Giddings.

Source:  Harvard University Archives. Examination Papers 1917 (HUC 7000.28, vol. 60). Papers Set for Final Examinations on History, History of Religions,…, Economics,…, Fine Arts, Music in Harvard College. June, 1918, p. 51.

Image Source:  “Alkira-Kiuma Ceremony or the Tossing Ceremony of the Aranda Tribe (1904). At age twelve, the boy’s first initiation ceremony, tossed and caught by various male relatives.” From the webpage:  Australian Aboriginal – Initiation and Mourning Rites of Passage.

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Exam Questions Harvard

Harvard. Final exams for analytical sociology. Anderson, 1916-18

 

This post, besides providing information for a course in the Harvard economics curriculum during the early 20th century, also serves as a gentle reminder just how long academic sociology in the United States was treated as a subfield within the discipline of economics. In 1914-15, Assistant professor Benjamin M. Anderson, Jr. taught the sociology course open to both undergraduate and graduate students normally taught by Thomas Nixon Carver at Harvard (year-end final examination for Economics 8). Other courses taught by Anderson included “Money, Banking and Commercial Crises” and “Single Tax, Socialism, and Anarchism“. 

Exams for the companion course, “Historical Sociology” have been transcribed and can be found in the following post. Incidentally, both of Anderson’s sociology courses were listed as “primarily for graduates” whereas Carver’s Principles of Sociology course (Economics 8) was listed for both undergraduates and graduates.

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Course Description 1916-17

[Economics] 18a 1hf. Analytical Sociology. Half-course (first half-year). Tu., Th., and (at the pleasure of the instructor) Sat., at 2.30. Asst. Professor Anderson.

            The centre of this course will be in the problems of social psychology: the raw stuff of human nature, and its social transformations; imitation, suggestion and mob-mind; the individual and the social mind; social control and the theory of social forces; the relation of intellectual and emotional factors in social life. These problems will be studied in their relations to the whole field of social theory, which will be considered in outline, with some emphasis on the influence of physiographic factors and of heredity. Leading contemporary writers will be studied, and some attention will be given to the history of social theory. Instruction will be by lectures, discussion, and reports.

Source:   Division of History, Government, and Economics 1917-18. Official Register of Harvard University. Vol. 14, No. 25 (May 18, 1917), p. 65.

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Course Enrollment, 1915-16

[Economics] 18a 2hf. Assistant Professor Anderson — Analytical Sociology.

Total 18: 16 Graduates, 2 Seniors.

Source: Harvard University. Report of the President of Harvard College 1915-16, p. 60.

 

Final Examination, 1915-16
ECONOMICS 18a2

  1. What is the bearing of the Mendelian theory on social problems?
  2. What difference does it make for sociology whether or not we accept the doctrine of the inheritance of acquired characters? To what extent, if at all, and in what connections, does Giddings make use of this doctrine? How far, if at all, are his conclusions incompatible with Weismann’s doctrine?
  3. Explain what is meant by the “social mind.” By “social values.”
  4. Summarize the theory of McGee as to the origin of agriculture.
  5. Compare the views of Boas and W. B. Smith as to the comparative rôles of race and environment in the case of the American negro. What is your own view?
  6. What did you get from your reading of Tarde? Of Le Bon? of Ross’ Social Psychology? Let your summaries be brief, but not Vague! Differentiate the books.
  7. Summarize Giddings’ chapter on Demogenic Association.
  8. Illustrate the social transformation of the raw stuff of human nature by the case of either the instinct of workmanship, the sex instinct, or the instinct of flight and hiding.
  9. What reading have you done for this course?

Source: Papers Set for Final Examinations on History, History of Religions,…, Economics,…, Fine Arts, Music in Harvard College. June, 1916, pp. 62-3.

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Course Enrollment, 1916-17

[Economics] 18a 1hf. Assistant Professor Anderson — Analytical Sociology.

Total 7: 3 Graduates, 1 Senior, 1 Junior, 2 Others.

Source: Harvard University. Report of the President of Harvard College 1916-17, p. 57.

 

Final Examination, 1916-17
ECONOMICS 18a1

  1. Contrast the social psychologies of Tarde and Cooley.
  2. Contrast the social psychologies of Le Bon and Cooley.

Answer either 1 or 2, but not both.

  1. State, in a series of propositions, your conclusions as to the influence of the physical environment on social evolution.
  2. What sociological consequences flow from an acceptance of the doctrine of the non-inheritance of acquired characters?
  3. Contrast the views of Giddings and the lecturer as to the nature of sociology.
  4. State and discuss Boas’ position as to the race factor in the negro problem.
  5. Indicate what you have read for this course.
  6. Choose any topic within the scope of this course, and write in your own way about it. (Allow fifty minutes for this.)

Source:  Harvard University Archives. Examination Papers 1917 (HUC 7000.28, vol. 59). Papers Set for Final Examinations on History, History of Religions,…, Economics,…, Fine Arts, Music in Harvard College. June, 1917, p. 64.

____________________

 Course Enrollment, 1917-18

[Economics] 18a 1hf. Assistant Professor Anderson —Analytical Sociology.

Total 4: 2 Graduates, 1 Senior, 1 Junior.

Source:Harvard University. Report of the President of Harvard College 1917-18, p. 54.

 

Final Examination, 1917-18
ECONOMICS 18a1

  1. Explain the contract theory of society. What writers have developed this theory? What doctrines are commonly associated with the contract theory? Criticise this group of ideas.
  2. State and criticize Professor Carver’s theory of progress.
  3. State and criticize the hedonistic theory of progress.
  4. Summarize the discussion in Thomas of the influence of the physiographic environment.
  5. Summarize your reading in Sumner’s Folkways.
  6. Take any topic within the scope of this course, and write in your own way about it. (Allow an hour for this.)

Source:  Harvard University Archives. Examination Papers 1917(HUC 7000.28, vol. 60). Papers Set for Final Examinations on History, History of Religions,…, Economics,…,F ine Arts, Music in Harvard College. June, 1918, p. 51.

Image Source: Benjamin M. Anderson, Jr. in Harvard Class Album 1915.

 

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Economic History Exam Questions Syllabus Yale

Yale. American Economic History. Topics and final exam. Parker and Joskow, 1972

 

If my extremely fuzzy recollection of the graduate course in American economic history taught at Yale in the spring semester of 1972 by William Parker and Paul Joskow is to be trusted, many if not most of the readings came from these two texts:

  • American Economic Growth: An Economist’s History of the United States, Lance E. Davis, Richard A. Easterlin and William N. Parker (editors). New York: Harper & Row, 1972.
  • Robert W. Fogel and Stanley L. Engerman (eds.). The Reinterpretation of American History. New York: Harper & Row, 1971.

The topical outline and final examination questions for the course are transcribed below. 

One of the graduate students taking the course was the brilliant Willem Buiter who left a deep impression (that was probably reinforced and made permanent by Robert Solow having taught the Cowles Foundation Discussion paper by Tobin and Buiter (1974) to my cohort at M.I.T.). 

Careful readers will note the distinctly Yale custom of not displaying academic rank. We addressed our professors with Mr./Miss/Mrs./Ms. [it was a transition time for gender honorifics].

William Parker had a well-honed wit. His Adam-Smith inspired lyrics to the tune of the evergreen spiritual “Rock of Ages” has been posted earlier here at Economics in the Rear-view Mirror.

________________

Economics 133b—American Economic History
Spring 1972

Mr. Parker
Mr. Joskow

Schedule of Topics

  1. Establishing the National Economy
    1. The colonial economy.
    2. Problems of colonial and early national policy
    3. Regional economies to the Civil War
  2. Natural Sources of National Wealth
    1. Relations between Resources and Technology
    2. Population Growth and Organization of Labor Force
  3. The Process of Extensive Expansion
    1. Westward Movement and Agrarian Expansion
    2. Extension of Transportation and its Effects
  4. The Growth of Manufactures
    1. Expansion and Transformation of Light Industries
    2. Heavy Industry: Shifts in Location and Scale
  5. Economic Organization within the Market Economy
    1. Money, Finance and Controls over Investment
    2. The U.S. in the International Economy
    3. Economic Fluctuations through the Great Depression
  6. Non-market Organization and Controls
    1. Large Organizations in the American Economy
    2. Political Issues and Public Policies

 

Economics 133b
Final Examination
May 17, 1972

Take any three questions including at least one from each Part of the examination.

I.

  1. Trace the major developments in the economic history of one of the three major regions of the United States from 1750 through the 1830’s.
  2. What problems appear in measuring the economic growth of the United States before 1860? Distinguish between problems of source materials and problems of definition and concepts. What do the data most probably show about the growth rate between 1800 and 1850?
  3. The major sources of growth of agricultural productivity are: (1) Westward movement to new lands, (2) regional specialization deriving from market growth and transport improvements, (3) technical change. Discuss the influence of any one of these sources on agricultural productivity in 19thCentury United States.
  4. “Government policy toward the economy before 1860 was not controlled by the philosophical issue of laissez-faire vs. intervention, but by the political issue of federal-state relations.” Discuss with reference to specific policy areas (land policy, banking, tariffs, public works, etc.)
  5. Slavery and cotton go together in the sense that neither could have flourished in the South without the other. Do you agree? Explain.
  6. “The relative scarcity of labor in the American economy in the first half of the 19thCentury gave a labor-saving bias to the technology invented and introduced in that period.
    Analyze and discuss this statement, giving specific examples.

II.

  1. “The efficiency of a monetary and banking system can be judged by several criteria, notably: (1) elimination of the risk of individual losses, (2) variety of monetary and credit instruments available to supply individual preferences with respect to wealth holding, (3) effects on the volume of investment, (4) effects on the trend of prices and the stability of such a trend.
    Evaluate the American monetary and banking institutions with respect to these criteria over some 25-30 period in American history.
  2. What do you consider to be the main factors causing the increase in scale of firm in manufacturing industry between 1840 and 1890?
  3. Describe the major changes in the evolution of the balance of payments of the United States between colonial times and 1929. Do you think that phases in the growth process in the United States can be dated from turning points in the relation of the various items in the balance to one another.
  4. “The railroad is the mother of trusts.” Explain. Is this true for the United States?
  5. “Large organizations developed not just in manufactures, but in all sections of American economic life after 1880. The phenomenon therefore cannot be simply derived from the economies of large scale manufacture and the technological changes which produced them.” Do you agree? Discuss with specific reference to one industry and to one type of non-industrial organization (Labor, government, politics etc.)
  6. Increased government regulation of the economy between 1887 and 1914 was a response to the concerns of progressive elements in the country regarding the increasing concentration of American industry. Discuss the validity of this statement by looking at the causes and effects of several attempts by the federal government to regulate industrial structures or practices.

 

Source:  Irwin Collier, personal papers.

Image Source: Proceedings of the American Philosophical Society, Vol. 151, No. 2, June 2007.

Categories
Exam Questions Harvard

Harvard. Year-end exams. Money, Banking, Commercial Crises. Young, 1921-27

 

Today’s artifacts come from the roaring ’20s. Besides his courses in economic theory, Allyn A. Young taught a year long course at Harvard, “Money, Banking and Commercial Crises”. Before presenting enrollment figures and the exams for Young’s Economics 3, I have assembled a chronology that identifies the course instructors over the entire period 1911-1946. Links are provided to the related artifacts that have been transcribed here at Economics in the Rear-view Mirror. 

The chronology is followed by Young’s course description for 1924-25. Presumably there was a mid-year exam for the course, but these were not included in the printed collection of final course examinations. It is possible that the questions have been limited to the second-semester’s course content. This is something that definitely deserves checking.

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Chronology of the Harvard economics course
“Money, Banking and Commercial Crises”

This two semester course was the product of merging the one semester course “Commercial Crises and Cycles of Trade” (Economics 12) with the two semester sequence “Money” and “Banking and Foreign Exchange” (Economics 8a and 8b, respectively).

The new course “Money, Banking, and Commercial Crises” (Economics 8, then 3, and later 41) was a staple of economics course offerings for the next 35 years.

Economics 8

1911-12 taught by E.E. Day

Economics 3

1912-13, 1913-14 taught by E.E. Day.

Money, Banking, and Commercial Crises (1914-15) taught by Benjamin M. Anderson.

1915-16 taught by Norman John Silberling

Money, Banking, and Commercial Crises (1917-18) taught by Benjamin M. Anderson.

1918-19, 1919-20 taught by A. E. Monroe.

1920-21 through 1926-27 taught by Allyn A. Young. Year-end exams transcribed below.

1927-28 through 1931-32 taught by John H. Williams

1932-33 taught by John H. Williams, Joseph Schumpeter and Lauchlin Currie.

1933-34 [course title: Money, Banking, and Cycles] Seymour Harris

1934-35, 1935-36 taught by John H. Williams and Seymour Harris

Economics 41

1936-37  taught by John H. Williams and Seymour Harris

Money, Banking, and Commercial Crises (1937-38) John H. Williams and Richard V. Gilbert.

1938-39 to 1941-42 taught by John H. Williams and Seymour Harris

1942-43, 1943-44 taught by Alvin Hansen and John H. Williams

1944-45 first semester taught by Schumpeter, second semester by Hansen and Williams

1945-46 Economics 41 morphed back into a two semester course “Money and Banking” taught by John H. Williams with a new one term course “Business Cycles” taught by Alvin Hansen.

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Course Description, 1924-25

[Economics] 3. Money, Banking, and Commercial Crises. Mon., Wed., Fri., at 2. Professor Young.

In this course money and credit will be studied with special reference to the part they play in the present economic system. The principal problems of public policy with respect to the control of money and banking will be discussed. Foreign exchange, organized speculation in its relation to the money market, and the characteristic phenomena of commercial crises will be considered in some detail. The course will be conducted by means of lectures, discussions, frequent short reports or exercises on assigned topics, and (in the second half-year) a thesis based on work in the library. Certain subjects, such as the monetary and banking history of the United States, will be covered almost wholly by assigned reading, tested by written papers.

Source:  Division of History, Government and Economics 1924-25 published in Official Register of Harvard University, Vol. 21, No. 22 (April 30, 1924), p. 67.

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Enrollment, 1920-21

[Economics] 3. Professor Young —Money, Banking, and Commercial Crises.

Total 148: 6 Graduates, 34 Seniors, 67 Juniors, 26 Sophomores, 3 Freshmen, 30 Others.

Source:  Harvard University. Report of the President of Harvard College 1920-21, p. 19.

 

Year-end examination, 1920-21
HARVARD UNIVERSITY
ECONOMICS 3

  1. What is a dollar?
  2. In what manner and why were bank reserves inelastic under the national banking system? What were the consequences?
  3. Discuss the relation of overproduction to crises, distinguishing carefully different types of overproduction.
  4. Outline the sequence of events in a typical business cycle.
  5. Define: federal reserve bank note, gold-exchange standard, “value of money.”
  6. In what different ways may federal reserve notes be issued?
  7. Explain and discuss the “equation of exchange.”
  8. Describe and explain the dominating position the London money market held before the war.

 

Source:  Harvard University Archives. Examination Papers 1921 (HUC 7000.28, No. 63), Papers Set for Final Examinations [in] History, Church History,…,Economics,…, Fine Arts, Music. June, 1921, p. 56.

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Course announcement, 1921-22

[Economics] 3. Money, Banking, and Commercial Crises

Mon., Wed., Fri., at 1.30. Professor Young.

Source:  Harvard University, Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences for the Academic Year, 1921-22 (Third Edition),p. 109.


Year-end examination, 1921-22
HARVARD UNIVERSITY
ECONOMICS 3

  1. Draw up a statement showing the condition of a national bank. Explain the meaning of the various items.
  2. Under what conditions is a large surplus an indication of a bank’s strength? How may it be an indication of weakness?
  3. To what classes of persons are rising prices advantageous? To what classes are they disadvantageous?
  4. Define: gold exchange standard, banker’s acceptance, finance bill, bimetallism, index number.
  5. What do you take to have been the causes of the fall of prices between 1874 and 1896?
  6. Why were “surplus reserves” under the national banking system normally exceedingly small?
  7. State and explain the Ricardian theory of gold movements. Are the recent movements of gold from Europe to the United States explainable by the Ricardian principle?
  8. What relation was there between the Bank Act of 1844 and the controversies of the restriction period?
  9. If the weight of the gold dollar were reduced by half would prices be doubled? Explain your reasoning.
  10. “The bulk of the acceptance business arising out of the foreign trade of the entire world has for many years been conducted in London.” Explain what this statement means and why it is true.

Final. 1922

 

Source:  Harvard University Archives. Examination Papers 1922 (HUC 7000.28, No. 64), Papers Set for Final Examinations[in] History, Church History,…,Economics,…, Social Ethics, Education. June, 1922.

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Enrollment, 1922-23

[Economics] 3. Professor Young—Money, Banking, and Commercial Crises.

Total 129: 6 Graduates, 33 Seniors, 75 Juniors, 11 Sophomores, 1 Freshman, 3 Others.

Source:  Harvard University. Report of the President of Harvard College 1922-23, p. 92.


Year-end examination, 1922-23
HARVARD UNIVERSITY
ECONOMICS 3

  1. Define: money of account, standard of deferred payments, inflation, gold-exchange standard, discounting.
  2. Give an account of the life-history of a typical commercial long bill of exchange, as used in international trade.
  3. Discuss the nature and significance of the par of exchange between two countries when one has a gold standard and the other has (a) a gold standard, (b) a silver standard, (c) inconvertible paper.
  4. Is New York City likely to become the center of the world’s foreign exchange markets? Discuss.
  5. In what ways are federal reserve notes and clearing-house loan certificates alike? In what ways are they unlike?
  6. Professor W. C. Mitchell holds that prosperity breeds a crisis because of (a) the gradual increase in the costs of doing business, and (b) the accumulating tension of the investment and money markets. Explain and discuss.
  7. Was the federal reserve system responsible for the rise of prices between 1917 and 1920 and for the subsequent drop? Discuss.
  8. In what ways do the federal reserve banks effect (a) regional and (b) national clearings?
  9. On what grounds is it generally held that a larger use of bank acceptances in this country is desirable?

Final. 1923.

 

Source:  Harvard University Archives. Examination Papers 1923 (HUC 7000.28, No. 65), Papers Printed for Final Examinations [in] History, History of Religions,…,Economics,…, Social Ethics, Anthropology. June, 1923.

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Enrollment, 1923-24

[Economics] 3. Professor Young—Money, Banking, and Commercial Crises.

Total 119: 2 Graduates, 25 Seniors, 81 Juniors, 5 Sophomores, 1 Freshman, 5 Others.

Source:  Harvard University. Report of the President of Harvard College 1923-24, p. 106.

 

Year-end examination, 1923-24
HARVARD UNIVERSITY
ECONOMICS 3

Answer nine questions.

  1. Explain the first and either the second or the third of these theories of the business cycle: (1) the “banking theory”; (2) Hobson’s theory of over-saving; (3) Fisher’s theory of the lagging adjustment of interest.
  2. “It thus appears that the Bank of England’s official rate is often through long periods a mere empty symbol, leaving no actual relation to the real price of money in London; and only becomes effective, and a factor in the monetary position when…” When?
  3. Draw up a statement showing the principal items which enter into the balance of payments.
  4. What conditions must be fulfilled if New York is to become the center of the world’s foreign exchange markets?
  5. State and discuss the doctrine of purchasing-power parity.
  6. Discuss the open-market operations of the federal reserve banks, with special reference to (a) the provisions of the law, (b) the purposes of such operations, (c) their relation to possible changes in prevalent types of commercial paper.
  7. Why did national bank notes constitute an inelastic currency? in just what manner do federal reserve notes constitute an elastic currency?
  8. Discuss the effect of organized speculation on prices, taking account of the fact that different types of price variations cover different periods of time.
  9. G. Moulton lists as “fallacies,” (1) the notion that a nation’s capacity to pay a foreign debt (such as reparations) is measured by the excess of its annual production over its annual consumption, and (2) the notion that a country can pay such a debt by selling securities to other countries. Do you agree? Explain.
  10. “In the main, banks do not lend their deposits, but rather, by their own extensions of credit, create the deposits.” Explain.

Final. 1924.

 

Source:  Harvard University Archives. Examination Papers 1924 (HUC 7000.28, No. 66), Papers Printed for Final Examinations [in] History, History of Religions,…, Economics,…, Psychology, Social Ethics. June, 1924.

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Enrollment, 1924-25

[Economics] 3. Professor Young—Money, Banking, and Commercial Crises.

Total 111: 1 Graduate, 22 Seniors, 72 Juniors, 12 Sophomores, 1 Freshman, 3 Others.

Source:  Harvard University. Report of the President of Harvard College 1924-25, p. 75.

 

Year-end examination, 1924-25
HARVARD UNIVERSITY
ECONOMICS 3

Answer eight questions.

  1. Some writers hold that business cycles are caused by the expansion and contraction of bank credit. Why and how, in their view, does bank credit expand and contract?
  2. “A country can pay a foreign debt only by exporting more than it imports.” Explain and discuss critically.
  3. What was the major defect of the old national banking system?
  4. Define: rediscount, trust company, par collections, gold standard, purchasing power parity.
  5. “The Bank of England has power to exert a decisive influence over the magnitude of the gold movements to and from England.”—Furniss.
  6. What are the distinguishing characteristics (economic or legal, not physical characteristics) of the following types of money: silver dollars, United States notes, national bank notes, federal reserve notes?
  7. What are the prerequisites to the stabilizing of a depreciated paper currency?
  8. In what measure was the federal reserve system responsible for the rapid rise of prices in 1919 and 1920 and for the subsequent collapse?
  9. The federal reserve banks hold nearly $3,000,000,000 in gold, amounting to about 75 per cent of their liability on account of deposits and note issues combined, and constituting a large idle investment. Under what conditions would a considerable part of this gold be exported to other countries?

Final. 1925.

 

Source:  Harvard University Archives. Examination Papers 1925 (HUC 7000.28, No. 67), Papers Printed for Final Examinations [in] History of Science, History, …, Economics,…, Anthropology, Military Science. June, 1925.

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Enrollment, 1925-26

[Economics] 3. Professor Young—Money, Banking, and Commercial Crises.

Total 110: 31 Seniors, 64 Juniors, 8 Sophomores, 1 Freshman, 6 Others.

Source:  Harvard University. Report of the President of Harvard College 1925-26, p. 77.

 

Year-end examination, 1925-26
HARVARD UNIVERSITY
ECONOMICS 3

Answer eight questions.

  1. Define deposits, discount, monetary standard, bimetallism.
  2. Formulate the “quantity theory” in any way that you prefer, and discuss it critically.
  3. A Brazilian firm draws a 90-day bill upon a London banker on account of a shipment of coffee to Boston.

(1) Why should the London bill be preferred to a bill upon New York or Boston?
(2) What is done with the bill after it reaches London?
(3) How is the bill finally settled?

  1. Some writers hold that when a government issues inconvertible paper money it obtains what is virtually a “forced loan.” Others hold that such an issue is more like taxation. What is your opinion, and why?
  2. Give an account of one of the following:

The socialist theory of crises.
Hobson’s theory of over-saving.
The “banking theory” of crises.

  1. Explain briefly the meaning of any two of the following phrases:

Par-collections controversy.
Open market policy.
Gold settlement fund.
Rediscounting

  1. Compare the Bank of England and either the Bank of France or the Reichsbank with respect to

(a) restrictions on note issue;
(b) discount policy.

  1. Was the federal reserve system responsible for the inflation of 1919-20 and the ensuing collapse? Explain.
  2. Just why, in your opinion, did the mark (or the franc, or the greenback) depreciate?

Final. 1926.

 

Source:  Harvard University Archives. Examination Papers 1926 (HUC 7000.28, No. 68), Papers Printed for Final Examinations [in] History, History of Religions, …, Economics,…, Social Ethics, Military Science. June, 1926.

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Enrollment, 1926-27

[Economics] 3. Professor Young and Mr. Marget.—Money, Banking, and Commercial Crises.

Total 125: 2 Graduates, 27 Seniors, 74 Juniors, 14 Sophomores, 2 Freshmen, 6 Others.

Source:  Harvard University. Report of the President of Harvard College 1926-27, p. 74.

 

Year-end examination, 1926-27
HARVARD UNIVERSITY
ECONOMICS 3

Answer eight questions.

  1. Explain and discuss critically some form of the “banking” or “credit” theory of business cycles.
  2. “If prices are rising” Hawtrey observes, “the mere holding of commodities in stock yields an additional profit over and above the usual dealer’s percentage on the turn-over. If traders are to be deterred from borrowing money to buy commodities, the rate of discount must be high enough to offset the additional profit. But, it may be asked, how is this possible when prices are rising at the rate of 30 per cent per annum?” Hawtrey’s answer? Your own?
  3. Discuss critically either (a) Fisher’s proposals for stabilizing the price level, or (b) proposals for attaining the same end by controlling the supply of bank credit.
  4. Select two of the following and discuss their significance as “causes” of the depreciation of inconvertible paper money: (1) excessive quantity; (2) ultimate redemption uncertain; (3) unbalanced budget; (4) adverse balance of foreign payments; (5) speculation.
  5. Define: rediscounts, purchasing-power parity, invisible exports, monetary standard, par collections.
  6. Compare the note-issue system of the Bank of England (as established by the Act of 1844) with the note-issue system of the federal reserve banks, with particular reference to (a) separation of “banking” and “issue” departments, and (b) the type of assets by which the notes are “covered.”
  7. In what way or ways do purchases and sales of government securities in the New York money market by the federal reserve banks affect the state of that market?
  8. If you were Dictator of France, and took account of considerations of justice as well as of expediency, would you plan to stabilize the franc at its present (gold) value? Or would you plan for a gradual recovery of its pre-war value? Why?
  9. Discuss the relation of international gold movements to changes of (a) relative price levels, (b) relative discount rates.

Final. 1927.

 

Source:  Harvard University Archives. Examination Papers 1927 (HUC 7000.28, No. 69), Papers Printed for Final Examinations [in] History, History of Religions, …, Economics,…, Social Ethics, Military Science. June, 1927.

Image Source: Allyn Young in Harvard Classbook 1925.

 

 

Categories
Exam Questions M.I.T.

M.I.T. Core Micro Theory. Exam Questions for Resource Allocation/Price System. Weitzman, 1973

 

In earlier posts I provided transcriptions of the course outline and readings and the final examination questions for Martin Weitzman’s 1974 course on resource allocation and the price system that was the second of four half-term courses that made up the required core graduate microeconomic theory sequence at M.I.T. back then. In the approximately one hundred page typescript that he distributed for his course Weitzman also included three earlier exams from his course. These exams are transcribed below. The September exam was offered for people to place out of taking the course, the November exam would have been the actual course final examination, and I presume the following February exam was offered as a make-up examination.

An expression that Martin Weitzman was fond of saying to get us to think about the economic intuition behind some result or to motivate an argument was for us to first consider “a quick-and-dirty banker’s calculation”. The diagram above was just borrowed from a random blog post because of its “quick-and-dirty” theme and was never used by Weitzman.

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Typically three questions are answered in an hour and a half.

Exam
(September, 1973)

  1. There are n “investment opportunities” indexed by i = 1,2,…, n. Up to ci dollars can be invested in the ith investment opportunity, and each dollar so invested yields ai present value dollars back (ai > 1). There is a budget constraint limiting investment spending to M dollars.
    1. Specify the programming problem of picking investments to maximize returns subject to a budget constraint.
    2. Describe precisely the solution to the problem.
    3. What is the shadow price of an extra dollar of budget?
    4. If a new project is discovered which pays an+1 per dollar invested, should it be undertaken? Show how the shadow price of an extra dollar of budget can be used to easily give an answer. (Hint: if you are having trouble, try a numerical example.)
  2. There are n ways of combining capital with labor to produce output. The ith technique (i = 1,…,n) has coefficients ai for labor per unit of output and bi for capital per unit of output. If K units of capital and L units of labor are available, we can define a production function F(K,L) as follows:

\begin{array}{c}F\left( K,L \right)=\max \sum\limits_{i=1}^{n}{{{y}_{i}}}\\\text{subject to}\\\sum\limits_{i=1}^{n}{{{a}_{i}}{{y}_{i}}}\le L\\\sum\limits_{i=1}^{n}{{{b}_{i}}{{y}_{i}}}\le K\\{{y}_{i}}\ge 0.\end{array}

a. Prove that F(K,L) is concave and homogeneous of degree one in K and L.
b. Interpret the shadow prices associated with the inequalities in labor and capital, for a given K and L.

  1. State clearly…
    1. …the conditions under which it is possible to decentralize allocation decisions and yet achieve efficiency in a production system by using prices.
    2. Prove the theorem you have just stated, or at least sketch an outline of it.
    3. Comment on the importance of the convexity assumption. Will and non-convexity spoil the situation irreparably? What about externalities?
  2. A village owns given amounts of grade A land, and grade B. The total labor supply of \overline{L}=5 is used solely for growing corn. The production function for grade A land is {{Y}_{A}}=12{{L}_{A}}-2L_{A}^{2} and for grade B land is {{Y}_{B}}=7{{L}_{B}}-\left( 1/2 \right)L_{B}^{2}. Naturally {{L}_{A}}+{{L}_{B}}=\overline{L}.
    1. The village uses the land as communal property to give each man an equal income, i.e., everyone gets an amount of A land or an amount of B land which yields each one the same output when he works it. Spell out in detail what this solution implies. Is this an efficient social production scheme? Why or why not?
    2. Suppose the village chief hires a consultant from 14.122. His problem is to maximize total output (YA+ YB) subject to production constraints. Then returns are equally distributed. What is the solution? What is the marginal product of labor?
    3. Let the marginal product of labor from (b) be w. Now show that if plots A and B are run as profit-maximizing firms with w being the wage rate (maximize separately {{Y}_{A}}-w{{L}_{A}} and {{Y}_{B}}-w{{L}_{B}}), that society ends up with the same solution as in (b). What does this mean? What is the difference between (b) and (c) especially as regards workers’ welfare? Are the workers better off under (a) or (c)? Would your answer have to be the same if the production functions changed? Explain.
  3. The following table specifies four processes for the production of steel. Assume
    1. factors of production are perfectly divisible and transferable among processes,
    2. all processes exhibit constant returns to scale,
    3. the wage rate is $10 per man/day,
    4. production is always efficient.
Factor requirements/ton of steel/day
Process No. Man-days Machine days
1 2 5
2 4 3
3 2 2
4 6 1

(i) Initially only processes 1 and 2 are known and both are in use. Draw one diagram showing the unit isoquant for steel production and another showing the long-run average total cost curve for steel production. Indicate the magnitude of long-run average total cost per ton of steel on your cost diagram.
(ii) Show on the relevant diagrams the unit isoquant and long-run average total cost curve which prevail after the discovery of processes 3 and 4.
(iii) Suppose that prior to the change in technology some firm was producing 10 tons of steel per day by operating each process at a level of 5. On your cost curve diagram show this firm’s short-run average total cost curve before and after the change in technology. Indicate the magnitude of any shifts in the cost curve on your diagram. (Note: in the short-run labor can be hired in any desired amount but the total amount of machinery a firm possesses is fixed.).

 

Exam
(November, 1973)

  1. There are n types of machine, indexed by i= 1,2,…, The ith type of machine is designed to work with {{\alpha }_{i}} workers, in which case it produces {{\beta }_{i}} units of output. There are {{\gamma }_{i}} machines of type i available.
    1. Formulate the problem of finding the minimum amount of labor to produce a given amount of output, say .
    2. Describe precisely the solution to the problem for arbitrary .
    3. What is the shadow cost of an extra unit of output and why?
    4. What is the shadow rental on a machine of type iand why?
    5. If a new machine is discovered of type n+1 with specification {{\alpha }_{n+1}}, {{\beta }_{n+1}}, {{\gamma }_{n+1}}, should it be used? Show how the shadow cost of an extra unit of output can be used to easily give an answer.
  2. There are n plots of land. Land of type i (i= 1,…,n) can be used to grow either ai bushels of wheat or bi bushels of rye (or the appropriate combination).
    1. Characterize efficient specialization patterns for these n plots of land. Which land should grow which crop and why?
    2. Suppose (as in a competitive market economy) a price of wheat is announced and also a price of rye. Then every plot grows the profit maximizing crop. Is this efficient? Why or why not? (show directly).
    3. Show how a supply of wheat curve would be derived in a market economy. Is it upward sloping? Why or why not?
  3. A firm consists of two plants. For each of statements (a) and (b), either prove the statement or give a counterexample. Be precise.
    1. The firm’s overall production plan will be efficient whenever each plant is producing efficiently.
    2. If both plants are maximizing profits at the same prices, the resulting overall plan will be efficient for the firm.
  4. There are two products in an economy (guns and cars) and two basic factors of production (A and B). There are n techniques for producing guns: the ith technique uses ai units of A and bi units of B per gun. Similarly there are m techniques for producing cars: the ith technique uses up ai units of A and bi units of B per automobile. The economy has a total availability of units of A and units of B.
    1. Define carefully the production possibilities set for this economy. Sketch roughly what it looks like in the space of cars and guns.
    2. Prove that it must be convex (what does this mean geometrically?).
    3. State carefully why (b) is important for the possibility of effective indirect or decentralized control (using prices) of the way guns and cars will be produced.
  5. We derived the result that a free market competitive allocation of resources is efficient. Does this mean that a market system is the best way to organize an economy in the sense that it gives the greatest benefits? Why or why not? What are the major real world situations which would cause an exception to the above cited “result” in a real life market economy? Try to be as specific as possible in showing why and where the efficiency result breaks down for each cited example.
  6. Suppose a firm or economy consists of a number of divisions or subsectors, each of which is characterized by a convex technology. Then any efficient plan will have associated with it a set of prices (one for each good, the same prices for each subsector) such that the efficient plan is sustained by having each subsector maximize its own profits. Outline a detailed sketch of how the proof of such an assertion goes. Why is this sometimes called a “decentralization theorem”. What does it suggest as a way of efficiently organizing production?
  7. An organization has 2 inputs and 2 outputs, and a production set consisting of the following 7 activities, all scalar multiples of activities in the set, and all sums of activities in the set.
Activity a b c d e f g
Good 1 2 1 2 1 1 3 1
Good 2 0 2 1 1 1 1 3
Good 3 -2 -4 -3 -1 -3 -5 -6
Good 4 -2 -3 -4 -3 -1 -5 -4

a. Consider a plan to run activities (a, d,e) at a positive level. If this were an efficient plan, what shadow prices would be associated with it?
b. Is this plan efficient, in fact? Prove your answer by appealing to particular theorems or results.
c. Consider a plan to run activities (a, b,d) at a positive level. Is this an efficient? Why, or why not?

 

Exam
(February, 1974)

  1. A firm consists of two plants. There are no externalities. For each of statements (a) and (b), either prove the statement or give a counterexample. Be precise.
    1. The firm’s overall production plan will be efficient whenever each plant is producing efficiently.
    2. If both plants are maximizing profits at the same positive prices, the resulting overall plan will be efficient for the firm.
        An organization has a production set consisting of the following 7 activities, all scalar multiples of activities in the set, and all sums of activities in the set.
  2. An organization has a production set consisting of the following 7 activities, all scalar multiples of activities in the set, and all sums of activities in the set.
Activity a b c d e f g
Good 1 2 1 2 4 0 3 0
Good 2 2 5 1 0 -1 1 2
Good 3 -1 -3 -1 -1 1 -2 0
Good 4 -2 -3 -4 -4 -3 -3 -1

a. Consider a plan to run activities (a,d,e) at a positive level. If this were an efficient plan, what shadow prices would be associated with it?
b. Is this plan efficient, in fact? Prove your answer by using the prices from (a) and appealing to particular theorems or results.
c. Consider a plan to run activities (a,d,g) at a positive level. Is this an efficient plan? Why, or why not?

  1. State…
    1. …clearly the conditions under which it is possible to decentralize allocation decisions and yet achieve efficiency in a production system by using prices.
    2. Prove the theorem you have just stated, or at least sketch an outline of it.
    3. Comment on the importance of the convexity assumption. Will any non-convexity spoil the situation irreparably? What about externalities?
  2. The following table specifies four processes for the production of steel. Assume
    1. factors of production are perfectly divisible and transferable among processes,
    2. all processes exhibit constant returns to scale,
    3. the wage rate is $10 per man/day,
    4. production is always efficient.
Factor requirements/ton of steel/day
Process No. Man-days Machine days
1 1 2.5
2 2 1.5
3 1 1
4 3 .5

(i) Initially only processes 1 and 2 are known and both are in use. Draw one diagram showing the unit isoquant for steel production and another showing the long-run average total cost curve for steel production. Indicate the magnitude of long-run average total cost per ton of steel on your cost diagram.
(ii) Show on the relevant diagrams the unit isoquant and long-run average total cost curve which prevail after the discovery of processes 3 and 4.
(iii) Suppose that prior to the change in technology some firm was producing 10 tons of steel per day by operating each process at a level of 5. On your cost curve diagram show this firm’s short-run average total cost curve before and after the change in technology. Indicate the magnitude of any shifts in the cost curve on your diagram. (Note: in the short-run labor can be hired in any desired amount but the total amount of machinery a firm possesses is fixed.)

  1. Consider the following production function:Y={{T}^{\alpha }}{{L}^{1-\alpha }}
    where Y is output, T and L are inputs and 0 < {{\alpha }} < 1.

a. Prove that this production function has constant returns to scale.
b. Describe the production set that corresponds to this production function. Which points are efficient?
c. Given an arbitrary efficient point (Y*, T*, L*), find the shadow or efficiency prices associated with that point.
d. Prove that the production set is convex.

  1. Let i be an index of land plots running from 1 to 10. The higher the index, the more moisture in the soil. Either rye or wheat can be grown. Land of type i (i=1,…,10) can costlessly produce either 5 units of rye or i units of wheat (or an appropriate combination).
    1. If a total of 30 units of rye is to be grown, what is the most wheat that can also be obtained?
    2. For the same situation as in (a), what are the shadow prices of wheat and rye? Explain fully what these shadow prices mean. What is the shadow rent on land of various types?
    3. Describe in general the efficient patterns of specialization. Which land should grow which crop and why?
    4. Derive the supply of wheat curve and show what it looks like.
    5. Verify that any profit maximizing output combination is efficient.

Source:  Martin Weitzman’s Notes to 14.122, personal copy of Irwin Collier, pp. 88-97.

Image Source: Blogpost: “The truth about quick and dirty” POSTED BY NIK ⋅ 10 JULY 2007 at niksilver.com

Categories
Exam Questions Oxford

Oxford. Five Economics Exams. Intro, Intermediate, History, International, Money & Banking, 1902

 

Something I find particularly interesting in the following five exams is that the second course in political economy at Oxford in 1902 was based upon the American textbook, Political Economy, by Francis A. Walker.

________________

SECOND PUBLIC EXAMINATION.
Pass School. Group B. 3.
Political Economy. I.

Adam Smith’s Wealth of Nations.

Time allowed—3 Hours.

  1. “Why have gold and silver been commonly chosen as the material of money?
  2. How far did Adam Smith anticipate (a) the Malthusian theory of population, (b) the law of diminishing returns?
  3. Explain why the earnings of labour are different in different occupations.
  4. Give an account of the Mercantile System and describe the chief methods adopted under its influence.
  5. In what ways have the results of free trade in England differed from those suggested as probable by Adam Smith?
  6. Compare Greek, Roman, and modern colonies as to (a) the motives which led to their foundation, and (b) the conditions of their prosperity.
  7. In what ways, besides taxation, may a state raise revenue? Are any of them important in England at the present time?
  8. What information is given by Adam Smith as to the condition of Hindostan, China, Holland, and Scotland?
  9. Give Adam Smith’s views on—

(a) the importance of the carrying trade;
(b) the expediency of usury laws;
(c) hearth money;
(d) taxes on ale-houses;
(e) land taxes.

  1. Explain and examine the following:—

(a) ‘Labour is the real measure of the exchangeable value of all commodities.’
(b) ‘The whole price of any commodity must finally resolve itself into some one or other or all of three parts.’

[T. T. 1902.]

 

SECOND PUBLIC EXAMINATION.
Pass School. Group B. 3.
Political Economy. II.

Walker’s Political Economy.

Time allowed—3 Hours.

  1. Explain the law of diminishing returns. What is its bearing on the theory of Rent?
  2. To what extent is the condition of the working-classes affected by the absence of perfect competition?
  3. What are the conditions which favour the growth of capital in a country?
  4. What is the connexion between Cost of Production and the Price of a Commodity?
  5. Under what circumstances is it expedient for a country to import goods although it could produce them more cheaply than the country from which they are imported?
  6. Why are the total exports from a country and the total imports into it not usually equal in value?
  7. Describe the chief functions of a modern bank.
  8. What is Bimetallism? What claims are made on its behalf, and how far are they valid?
  9. What is a protective duty? Under what circumstances, if any, is such a duty expedient?
  10. Explain the following phrases: — economic man, territorial division of labour, debasement of coin, depreciation, tabular standard, Gresham’s law, the theory of the diffusion of taxes.

[T. T. 1902.]

Source: Oxford University Examination Papers, Second Public Examination, Pass School, Group B.3. Trinity Term, 1902, pp. 29-30.

________________

 

SCHOOL OF MODERN HISTORY.
Political Economy and Economic History.

[Candidates must answer questions from both sections of the paper.]

I.

  1. What circumstances, in Mill’s opinion, make (a) Wages high, (b) Profits low, (c) Interest vary, (d) Rents fall?
  2. Enumerate, explain, and, if necessary, criticize Mill’s four fundamental propositions respecting Capital.
  3. Explain, with examples, the operation, advantage, and danger of the Credit system, as it exists in England.
  4. Distinguish the forces by which value is determined from the means by which it is measured, and give a careful discussion of the latter.
  5. Discuss Mill’s views upon any one of the following:—

(a) Unproductive Labour.
(b) Competition.
(c) Equality of Taxation.
(d) An inconvertible paper currency.

  1. Comment on the following passages from Mill:—

(a) Hardly anything worse can be said of the worst laws on the subject of industry and its remuneration than that they place the energetic and the idle, the skillful and the incompetent, on a level: and this, in so far as it is in itself possible, it is the direct tendency of the regulations of these unions to do.
(b) The exchange value of a thing may fall short, to any amount, of its value in use; but that it can ever exceed the value in use, implies a contradiction.
(c) A thing may sometimes be sold cheapest, by being produced in some other place than that at which it can be produced with the smallest amount of labour and abstinence.
(d) It must be remembered, too, that general high prices, even supposing them to exist, can be of no use to a producer or dealer, considered as such; [sic]

  1. Define Free Trade. How far do (a) countervailing duties, (b) the recent Tax on imported corn, run counter to the principles contained in your definition?

II.

  1. Do you consider that the economic prosperity of England has been attained by means of, or in spite of, Legislation?
  2. What were the advantages and disadvantages of the Manor System to the peasant?
  3. Do you think that Economic History can be profitably studied apart from the study of Political Economy?
  4. Explain any of the following:—Staple Towns; Convertible Husbandry; Drawbacks; Gresham’s Law; Navigation Acts; Truck Acts; Sinking Fund; Libelle of English Polycye.
  5. Compare the debt which England owes to wool with that which she owes to iron.
  6. Explain and comment upon the following:—
    (a) Therefore, to speak of the abolishing of usury is idle. All states have ever had it, in one kind or rate, or other. So as that opinion must be sent to Utopia. (Bacon’s Essays.)
    (b) In agriculture, too, Nature labours along with man; and though her labour costs no expense, its produce has its value, as well as that of the most expensive workmen. (Adam Smith.)
    (c) To found a great Empire for the sole purpose of raising up a people of customers, may at first sight appear a project fit only for a nation of shopkeepers. It is, however, a project altogether unfit for a nation of shopkeepers. (Adam Smith.)
  7. How far did the agricultural improvements of the eighteenth century make the Industrial Revolution possible?

[T. T. 1902.]

 

SCHOOL OF MODERN HISTORY.
Political Economy. A.
Foreign Trade.

  1. ‘The one condition at once essential to, and also sufficient for, the existence of international trade is a difference in the comparative as distinguished from the absolute cost of producing the commodities exchanged.’ Cairnes, cited by Bastable.
    Explain the principle referred to; and give examples from the commercial history of the nineteenth century of mistakes in policy which may be traced to want of acquaintance with this principle.
  2. ‘Tiefgreifende Umwälzungen der Vermögensverhältnisse, wie sie unter Ricardo’s Voraussetzungen zu erwarten sind, können nicht nur für die Kapitalisten, sondern auch für die Masse der Arbeiterbevölkerung so grosse Uebel erzeugen, dass man häufig vorziehen muss, auf eine an sich zweckmässigere internationale Verteilung der Production zu verzichten…. Es ist vorsichtig, darauf zu achten, dass die Wegräumung der schützenden Schranken keine gemeinschädliche Erschütterung des Wirtschaftslebens verursacht.’
    ‘Sogenannte Erziehungszölle haben…für die auf der normalen Höhe der Entwicklung stehenden Kulturstaaten keinen Sinn und Zweck mehr.’ (Lexis.)
    Translate and comment on these passages.
  3. Trace the history of the Corn Trade from 1815 to Referring to Canning’s speech on the Corn Law in the latter year, criticize the measure then proposed by him.
  4. What were the advantages claimed by Macaulay, Peel, and Cobden, for a free trade in corn; and to what extent were these advantages realized by the abolition of the Corn Laws?
  5. Give some account of the Merchant’s Petition in 1820; and trace through the next six years the reforms in commercial policy of which it was the harbinger.
  6. ‘To re-establish duties upon the import of foreign produce, to be regulated by the principle of reciprocity, would be accompanied with insuperable difficulties.’ (Peel.)
    Give instances of the principle of reciprocity being employed by statesmen of the Free Trade persuasion with success.
  7. ‘The Budget of 1860 completed the work of freeing the Statute Book of the United Kingdom from the vast series of tolls which for many hundreds of years had cumbered its pages.’ (Report on the Customs Tariffs, 1897.)
    Review the simplifications of the tariff effected between 1840 and 1860; mentioning instances in which the remission of taxation was attended with an increase of revenue.
  8. Point out some of the difficulties attending the use of import and export statistics. Why is the money value of exports, both (a) absolutely and (b) relatively to that of imports, an imperfect measure of a country’s industrial prosperity?

[T. T. 1902.]

 

SCHOOL OF MODERN HISTORY.
Political Economy. B.
Currency and Banking.

  1. Mention and criticize some of the doctrines combated by Horner and Canning in their defence of the Report of the Bullion Committee.
  2. By what arguments did Ricardo defend the Resumption of Cash Payments against Mr. Western in 1822? Comment upon the ‘opinion which he (Mr. Ricardo) had given of the effect which had been produced on the value of gold by the purchases [of gold] made by the Bank.’
  3. ‘No currency can be good of which the permanent average value does not conform to the permanent average value of a metallic currency; but I do not admit the inference that in order to enable it to do this, its fluctuations in value must conform to the fluctuations in the value of a metallic currency.’ (J. S. Mill.)
    Compare Mill’s doctrine as to the regulation of a convertible currency with that which is embodied in the Bank Act of 1844.
  4. ‘The value of money is settled like that of all other Commodities by supply and demand and only the form is essentially different.’ (Bagehot.)
    Apply this statement to variations in the rate of discount on the London money-market.
    Is there any connexion between fluctuations of discount and permanent changes in the level of general prices?
  5. ‘The question what is the relation between the amount of money in a country and the general scale of prices existing therein’ is ‘perhaps the one upon which the most contradictory opinions have been expressed by economists of reputation.’ (Walker.)
    Express your opinion on this question; referring to the views of leading economists, in particular those of Professor Marshall.
  6. ‘A joint supply of gold and silver will probably be more stable than a supply of either metal separately.’ (Foxwell.)
    Does the principle involved in this statement—the tendency of independent variations to compensate each other—form a strong argument in favour of Bimetallism?
    With what success could the principle be applied to the use of a ‘tabular standard’—based on the variation in the prices of several commodities—for deferred payments?
  7. ‘It is agreed on all sides that violent fluctuations of prices are an evil in the long run; but the difference of opinion is as to whether it is the sudden rise of prices, or the subsequent fall which is mainly responsible for the evil.’ (Marshall.)
    ‘An appreciation of gold will upon the whole tend to put a drag upon production.’ (Foxwell.)
    Compare and comment on the views of Professors Marshall and Foxwell as to the detriment caused by a change in the level of prices.
  8. How would you measure a variation in the value of money with respect to commodities in general between two epochs?

[T. T. 1902.]

Source: Oxford University Examination Papers, Second Public Examination, Honour School of Modern History. Trinity Term, 1902, pp. 32-34

Image Source: Convocation House, looking S.E. 1634–36. ‘Plate 56: Bodleian Library, Convocation House and Schools Quadrangle’, in An Inventory of the Historical Monuments in the City of Oxford (London, 1939), p. 56. British History Online http://www.british-history.ac.uk/rchme/oxon/plate-56  [accessed 13 May 2018].

 

 

Categories
Chicago Exam Questions Fields

Chicago. Money and banking prelim exam questions, 1969

 

In Milton Friedman’s papers at the Hoover Institution Archives are filed copies of three preliminary exams for graduate students in economics from the Winter Quarter of 1969. Recent posts featured the transcriptions of the price theory prelim and the macroeconomics prelim ( or “income, employment and price level” as was the Chicago wont to say). This post takes a walk on the monetary side, namely, with the prelim for the field of money and banking. This exam was followed in the archival folder by a handwritten table by Friedman with the points awarded for the seventeen candidates who took the exam. Out of a maximum score of 240 possible points, the top exam received 189 points.  Failing grades were for 118 points and below (four examinees). The exams have Friedman’s mostly illegible notes written on them, presumably indications of the correct answers. Perhaps some day there will be a brave soul with greater patience than I possess who will try transcribing these academic scribblings of a few years back. 

The reading list for Milton Friedman’s money course from the Winter Quarter 1970 has been posted earlier.

_________________

MONEY AND BANKING
Preliminary Examination for the Ph.D. and the A.M. Degree
Winter Quarter, 1969

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

Your code number and NOT your name
Name of examination
Date of examination

Results of the examination will be sent to you by letter

Answer all questions. Time: 4 hours

  1. [40] The Federal Reserve has recently altered the method of calculating required and actual reserves. Required reserves are now calculated on the basis of average deposits two weeks earlier. Actual reserves equal average cash in vault two weeks earlier plus deposits at Federal Reserve Banks the current week. (There are a few other minor technical details that can be neglected.)
    Under this new system, the adjustment mechanism of the banking system is in principle dynamically unstable (explosive) for any one week by itself.

(a) Explain why the system is dynamically unstable.
(b) What factors render the system stable in practice?
How does the new system affect:
(c) The Federal Reserve’s ability to control the money supply;
(d) The significance of excess reserves, free reserves, and borrowings.

  1. [25] “Central bankers were highly receptive to the Keynesian analysis of monetary policy because it fitted in with their own preconceptions, which were based on the real-bills doctrine.” Explain why you agree or disagree, in the process summarizing the history of the real-bills doctrine.
  1. [25] A major relationship in most income-determination models is the negative interest elasticity of investment. But during the post war period in the U.S., falling interest rates have been accompanied by declining rates of investment in plant and equipment and a rising volume of residential construction.

(a) Does that suggest that residential construction is more interest-elastic than investment in plant and equipment?
(b) How far, if at all, has the observed pattern been related to central bank policy and the structure of financial intermediaries?

  1. [40 ]

(a) Construct a model for the analysis of economic policy in a closed economy, with an exogenous money supply, an income-elastic tax system, flexible prices, and saving a constant fraction of income.
(b) For a unique equilibrium, which variables do you regard as determined by this model, and which outside the model?
(c) Distinguish between monetary and fiscal policy in terms of your model.
(d) Can monetary policy be used to maintain stable prices? Can fiscal policy? Indicate the conditions in the model necessary for only one or the other to be effective.

  1. [40] Consider the problem of explaining the response in a stationary economy to a change that leads to increased unemployment of resources, such as an unanticipated fall in the demand for goods and services. Suppose that any increases in unemployment are temporary, with dynamic properties of the system such that there will be a return to an “equilibrium” or “natural” rate of unemployment if no further unanticipated shocks occur.

(a) Explain what the “natural rate of unemployment” means.
(b) Assume that the quantity of money is constant. Sketch out an explanation of the time path of output, employment of labor, price of goods, price of labor, and interest rate.
(c) Indicate what each of the following concepts means and how, if at all, each is relevant in explaining the adjustments: search unemployment, labor as a quasi-fixed factor of production, Phillips curve, expectations.

  1. [40] The loss in real value of money during inflation has been likened to a tax. Assume that inflation is fully anticipated. How much is the tax, who bears it, and who receives the proceeds:

(a) If there are 100 percent reserves and the central bank pays no interest on reserves, with commercial banks otherwise regulated?
(b) Same as (a) except there is fractional reserve banking?
(c) If there is fractional reserve banking and the central bank pays no interest on reserves, with commercial banks forbidden to pay a nominal rate of interest deposits higher than would be paid in the absence of inflation?
(d) Same as (c) except banks are also forbidden to charge nominal interest rates on loans higher than would prevail in the absence of inflation?
(e) If there is fractional reserve banking, no interest rate regulation on commercial banks, and the central bank pays interest on reserves totaling to the interest payments earned on its assets?

  1. [30] Assume that the U.S. stops pegging the price of gold and of other currencies, and in reaction to this measure[?], the European common market countries form a currency bloc linked internally by fixed exchange rates and permit the exchange rates of the common market currencies to float relative to the dollar. Assume that all other currencies float relative to the dollar.
    Compare monetary adjustment within the two currency areas (i.e. adjustment of the fifty states of the U.S. as compared to adjustment of the six countries of the common market).

 

Source: Hoover Institution Archives. Papers of Milton Friedman, Box 77, Folder 8 “University of Chicago , Econ 331”.

Image Source:  Milton Friedman (undated) from University of Chicago Photographic Archive, apf1-06231, Special Collections Research Center, University of Chicago Library.