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Chicago Courses Exam Questions

Columbia. Exam Questions for Econ 110. J. M. Clark, 1934

The course exam transcribed below would appear to correspond to John Maurice Clark’s course Economics 110 (Dynamics of value and distribution) which was offered in the Spring Session rather than Clark’s course Economics 109—Foundations of Social Economics which was offered in the Winter Session. Milton Friedman’s own notecards show that he did in fact attend Economics 109, but the content of the course as seen in Friedman’s notes is not reflected in the questions in the exam below. The handwritten note by Friedman identifying the exam as coming from  John Maurice Clark’s course “Social Economics” (i.e. Economics 109) and dated May 1934 is clearly incorrect. Examine the course description for Economics 110 to see if you agree.

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[COURSE DESCRIPTION]

Economics 110—Dynamics of value and distribution. 3 points Spring Session. Professor J. M. Clark. M. and W. at 2:10. 401 Fayerweather.

The functions of value and price; the dynamics of supply and demand for commodities and factors of production; the institution of competition; social vs. competitive schemes of distribution; value and expenses of production; expenses and ultimate costs of production; cumulative vs. self-limiting changes; the level of prices; economic rhythms.

Source: Columbia University Bulletin of Information, Thirty-third series, No. 26 (March 25, 1933). Courses offered by the faculty of Political Science for Winter and Spring Sessions 1933-1934. page 26.

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[Examination Questions for J. M. Clark’s Economics 110, Spring Term 1934.]

[Friedman’s handwritten note]
Exam in J. M. Clark’s course “Social Economics”, May 1934 [sic]

 

Answer three questions.

I.   Discuss the problem of the general characteristics of the supply-schedule for savings.

II.  Discuss whether the only geographical price-structure consistent with competition is one in which each producer sells at a price or prices which yield him a uniform amount at the point of production, the more distant purchasers paying the additional costs of transportation (Potter’s mill-base price.)

III. How would you draw the line between monopoly limited by substitution, and competition?

IV.  Discuss why competition between two or three large producers requires a different theoretical analysis from that which describes “pure competition” and why no single definitive answer to this problem has been found.

V.   Would you recommend further shortening of standard hours of labor per week, with wages per hour raised to give the worker not less than his former weekly earnings, as a means of stimulating business activity through increased purchasing power?

VI.  Can a cumulative increase in business activity be expected as a result of increased government spending during a depressions: (a) financed by borrowing, (b) financed by a sales tax? Could there be such an increase in physical volume of production and employment, or only in physical volume of business?

VI. B. (May be substituted for VI., but not both answered)
Under what conditions may an increase in expenditure for a given commodity have a cumulative effect in increasing the general volume of production; and under what conditions will it not have such an effect?

Source: Milton Friedman Papers, Hoover institution Archives, Box No. 115, Folder 13 (Biographical: Class Exams circa 1932-1938).

Image Source: Wikpedia.

 

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Harvard. Econ 113b. Schumpeter’s Grad Course on the History of Economics. 1940.

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Joseph Schumpeter offered this one semester, second term graduate course “History and Literature of Economics since 1776” nine times during the period 1940-1949. The core readings were basically unchanged. Below you will find the course enrollment figures and the reading list for 1940 (into which I have inserted the two additions from the reading list for 1941). Exam questions from 1940 and 1941 are included as well as an important research tip at the bottom of the posting. Nobel Laureates James Tobin and Robert Solow took this course in 1940 and 1947, respectively. I have gone to the trouble of providing links to almost the entire reading list as a public service to the history of economics community of scholars.

The (much reduced) reading list for the last time Schumpeter taught the course, Spring 1949 is transcribed in a later post.

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If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

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[Course Description: History and Literature of Economics since 1776]

Course work will mainly consist in critical study of the leading English, French, German and Italian contributions to economic thought in the nineteenth century. An introductory and a concluding series of lectures and discussions will provide the links with earlier and modern developments. Undergraduates who have passed Ec A are admitted without individual permission

Source: Joseph Schumpeter Papers, Harvard University Archives, HUG (FP) 4.62. Box 10 “Lecture Notes”, Folder “Ec 113, 1941”.

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Course Enrollment Statistics:

Grad. Students Seniors Juniors Radcliffe Other Total
1939-40 9 3 1 0 3 16
1940-41 11 2 0 3 1 17
1941-42 5 1 0 4 1 12
1942-43 10 3 0 6 3 22
1943-44 2 1 0 3 3 9
1944-45 Not offered
1945-46 18 2 5 25
1946-47 21 1 0 6 7 35
1947-48 17 4 0 2 7 30
1948-49 2 1 0 0 1 4

Note: The course number was Economics 113b until the academic year 1947-48, under the new course numbering system in 1948-49, it became Economics 213b. Joseph Schumpeter died in January 1950.

Source: Harvard/Radcliffe Online Historical Reference Shelf. Harvard President’s Reports.

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Economics 113b
[History and Literature of Economics since 1776]
1939-40
[second term]

 

I. For general reference you should currently consult:

Erich Roll, A History of Economic Thought (1939, [link to 1945 edition]), or
L. H. Haney, History of Economic Thought (1927).[1923 revised edition]

Suggestions:

John M. Keynes, Essays in Biography (Essays on Malthus, Marshall and Edgeworth).

 

II. Works dealing with the history of individual doctrines or problems. No assignment.

Suggestions:

E. Boehm-Bawerk, Capital and Interest, Vol. I.
E. Cannan, Theories of Production and Distribution (1924). [2nd ed., 1903]
F. W. Taussig, Wages and Capital (1896).
J. Viner, Studies in the Theory of International Trade (1937), Chs. I and II.
K. Marx, Theorien über den Mehrwehrt (1921). [1910 edition by Karl Kautsky: vol I, vol. II(1), vol. II(2), vol. III.]

 

III. This course covers many authors whose teaching is also dealt with in other courses and whose works are more or less familiar to every student. The most important of them are:

Adam Smith, Wealth of Nations, also read the introduction to Cannan’s edition.
David Ricardo, Principles of Political Economy.
John Stuart Mill, Principles of Political Economy; also read introduction to Ashley’s edition.
Alfred Marshall, Principles of Economics, particularly Book V.
John B. Clark, Distribution of Wealth (1899).

Suggestions:

Augustin Cournot, Principles of the Theory of Wealth (Fisher’s edition, 1927).
Léon Walras, Element d’économie pure (edition definitive, 1926).
Knut Wicksell, Lectures on Political Economy (Robbins’ edition, 1934). [volume I, volume II]

 

IV. In addition, the following books should be read, at least cursorily:

Richard Cantillon, Essai sur la nature du commerce en général (1755); English translation by Higgs (1931).
David Hume, Political Discourses (edition by Green and Grose, 1875), Vol. I. [Miller edition]
Sir James Steuart, Principles of Political Economy (1767). [Vol I (1767); Vol II ]
A. R. J. Turgot, Réflexions sur la Formation et la Distribution des Richesses (1766), (Oeuvres, ed. Daire, 1844). Vol I; Vol II.
Thomas R. Malthus, Essay on the Principle of Population (1798). [1803 edition, enlarged]
Jean B. Say, Traité d’économie politique (1803). [2nd ed. 1814] [1855 English translation from 4th and 5th editions]
William N. Senior, Outline of the Science of Political Economy (1836).
William St. Jevons, Theory of Political Economy (1871).
J. E. Cairnes, Leading Principles.
Karl Marx, first volume of Das Kapital (English translation).

Suggestions:

J. H. v. Thünen, Der isolierte Staat (ed. Waentig, 1930).
R. Auspitz und R. Lieben, Untersuchungen über die Theorie des Preises (1888), (also translation into French). [Vol. I (French); Vol. II (French)]
Carl Menger, Grundsätze der Volkswirtschaftslehre (London School reprints, 1934). [English translation with introduction by F. A. Hayek]
F. Y. Edgeworth, Mathematical Psychics (London School reprints, 1932).
M. Longfield, Lectures on Political Economy (London School reprints, 1931).
H. C. Carey, The Past, the Present and the Future (1848).
H. George, Progress and Poverty (1879).
S. Newcomb, Principles of Political Economy (1885).
Ph. Wicksteed, The Commonsense of Political Economy (1908).

 

V. Monographs on individual authors. No assignments.

Suggestions:

[Addition to list in 1940-41: Henry Higgs, The Physiocrats (1897)]
W. R. Scott, Adam Smith as Student and Professor (1937).
J. Rae, Life of Adam Smith (1895).
J. Bonar, Malthus and his Work (1924). [1885 ed.]
M. Bowley, Nassau Senior and Classical Economics (1937).
F. Mehring, Karl Marx (1936).
J. R. Hicks, Leon Walras (Econometrica, 1934).
[Addition to list in 1940-41: H. W. Jevons and H. S. Jevons, “William S. Jevons,” Econometrica]

Source: Syllabi, course outlines and reading lists in Economics, 1895-2003. Harvard University Archives, HUC 8522.2.1. Box 2, Folder “1939-40, 2 of (2)” and Folder “1940-41”.

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1939-1940
HARVARD UNIVERSITY
ECONOMICS 113b2

Answer any FOUR out of the following five questions:

  1. Discuss the wage-fund theory and its practical implications. In what sense was it resuscitated by Boehm-Bawerk and Taussig?
  2. Exponents of the Labor-Quantity theory of value and exponents of the Marginal Utility theory of value have for decades tried to refute each other. What is the true relation between the two theories?
  3. State and criticize the Marxian theory of Surplus Value or of Exploitation.
  4. What do you think of the so-called Ricardian theory of rent?
  5. What are the main objections that were raised against the “Austrian school” during the early stages of its development?

Final. 1940

 

Source: Joseph Schumpeter Papers, Harvard University Archives, HUG (FP) 4.62. Box 10 “Lecture Notes”, Folder “Ec 113, 1941”.

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1940-1941
HARVARD UNIVERSITY
ECONOMICS 113b2

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

  1. If a layman, trying to make intellectual conversation, asked you what Adam Smith’s performance consisted in, what would you say?
  2. What was the importance, for the economic theory of its time, of Malthus’ Essay on Population?
  3. Explain the meaning and use of the theorem usually referred to as Say’s Law.
  4. What are the conditions that would have to be fulfilled in order to make the labor-quantity theory of value true?
  5. State and discuss Ricardo’s version of the so-called law of the falling rate of profit.
  6. Jevons, Walras and Menger no doubt felt that they had revolutionized economic theory. What did this revolution consist in and how important do you think it was?
  7. Under modern conditions, most producers have no use for any significant part of their products. Hence their subjective valuation of these products depends on what these products will exchange for, that is to say, on their prices. How, then, can we derive these prices from utility schedules of buyers and sellers without reasoning in a circle?

Final. 1941.

Source: Joseph Schumpeter Papers, Harvard University Archives, HUG (FP) 4.62. Box 10 “Lecture Notes”, Folder “Ec 113, 1941”.

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Research Tip: 75 pages of student notes taken by future Nobel Laureate James Tobin for Economics 113b2 of the 1939-40 academic year are available in the James Tobin Papers at the Yale University Library Manuscripts Collection, Group No. 1746, Box. No. 6 in one of the hard-bound volumes of Tobin’s notes from his Harvard courses.

Image Source: Harvard Album, 1943.

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Harvard. Economic Theory II, Econ 202. Leontief, 1948-49

In a previous posting I provided the reading lists for the two term graduate course “Economic Theory I” , Economics 201, taught by Edward Chamberlin in 1947-48. “Economic Theory II”, Economics 202a and 202b, was taught by Wassily Leontief. Presuming a student who took both courses would have done this in consecutive years, I provide the course outlines, reading lists and the exam questions (only for Economics 202a) for the year 1948-49.

Leontief apparently did not get around to covering Part IV of Economics 202a in the Fall Term, since the entire section can be seen repeated for the first topic of the Spring term.

Besides Chamberlin’s course Economics 201 just mentioned. It is interesting to compare Leontief’s course with  that of Lloyd Metzler  and that of Milton Friedman at Chicago also in the same year.

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Economics 202a
Fall Term 1948-49

Economics 202a will cover the Theory of a Firm, the Theory of Individual Demand, Theory of Market Relationships, and introduce the basic concepts of the General Equilibrium Theory. 202b, as given in the Spring Term, will cover the Theory of Distribution (wages, capital and interest), profits), the Theory of General Equilibrium (Keynes), and introduce the basic concept of Welfare Economics and Economic Dynamics.

I.     Theory of a Firm

Costs; total, average, marginal.
Theory of the multiple plant firm.
Revenue; total, average, marginal.
Long and short run analysis
Supply under competitive and monopolistic conditions.
Production function, marginal productivity, increasing and decreasing returns.
Joint products.
Demand for factors of production.
Discontinuous relationships and non-marginal analysis.
Internal and external economies.
New invention and technological change.

Reading assignments:

Oscar Lange, “The Scope and Method of Economics,” Review of Economic Studies, Vol. XIII, (i), 1945-46, pp. 19-32.

E. A. G. Robinson, Structure of Competitive Industry, Chs. II, VII, VIII, pp. 14-35, 107-133.

Boulding, Economic Analysis, Part II, Chs. 18-26, pp. 375-595 (New edition: Chs. 20-26, pp. 419-552; Chs. 31, 32, pp. 669-733).

I. Fisher, “A Three-Dimensional Representation of the Factors of Production and Their Remuneration Marginally and Residually,” Econometrica, October, 1939.

George Stigler, “Production and Distribution in the Short Run,” Journal of Political Economy, 1939, pp. 305-327. Reprinted in Readings in the Theory of Income Distribution, pp. 119-142.

Joe S. Bain, The Economics of the Pacific Coast Petroleum Industry, Part I, Ch. V, pp. 84-114.

Lerner, Economics of Control, Chs. 15, 16, 17, pp. 174-211.

Chamberlin, “Proportionality, Divisibility, and Economies of Scale,” Quarterly Journal of Economics, February, 1948, pp. 229-262.

National Bureau of Economic Research, Cost Behavior and Price Policy, Ch. VII, pp. 142-169; Appendix C, pp. 321-329.

 

II.    Theory of the Household:

Theory of utility and indifference lines analysis.
Individual demand, prices and income.
Dependent and independent, competing and complementary, superior and inferior goods.
Measurability of utility.
“Marginal utility of money.”
Consumer surplus.
Interpersonal interdependence in consumers’ behavior.
Economic theory of index numbers.

Reading assignments:

Hicks, Value and Capital, Part I, Chs. I-III, pp. 1-54.

Boulding, Economic Analysis, Chs. 29, 30; pp. 636-685. (New edition, Chs. 33, 34; pp. 734-759).

 

III. Theory of Market Relationships:

Pure competition; individual and market supply and demand curves.
Stability of market equilibrium, statics and dynamics.
Monopoly and price discrimination.
Monopolistic competition.
Duopoly, oligopoly, bilateral monopoly, etc.
“Theory of games.”

Reading assignments:

Marshall, Principles of Political Economy [sic], Book V, Chs. III, V.

Chamberlin, The Theory of Monopolistic Competition, Chs. II, III, IV, and V.

Joan Robinson, The Economics of Imperfect Competition, Chs. 15 and 16.

Robert Triffin, Monopolistic Competition and the General Equilibrium Theory, Chs. I and II.

W. H. Nicholls, Imperfect Competition within Agricultural Industries, Ch. 18.

One of the following three articles:

Leonid Hurwicz, “The Theory of Economic Behavior,” American Economic Review, December, 1945, pp. 909-925.

Carl Kaysen, “A Revolution in Economic Theory?” The Review of Economic Studies, Vol. XIV (I), 1946-47, p. 1-15.

Jakob Marschak, “Theory of Games,” Journal of Political Economy, April, 1946, pp. 97-115.

 

IV.  Basic concepts of a general equilibrium theory:

Data and variables.
Price system and general interdependence.
Linear model of a general equilibrium system.

Reading assignments:

Lange, The Economic Theory of Socialism, pp. 65-72.

Cassel, The Theory of Social Economy, Vol. I, Ch. IV, pp. 134-155.

E. H. Phelps Brown, Framework of the Pricing System, in particular chapters dealing with general equilibrium theory.

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DEPARTMENT OF ECONOMICS
Reading Period Assignments
January 3—January 19, 1949

[…]

Economics 202: Howard S. Ellis, Editor, A Survey of Contemporary Economics, 1948, Ch. 1, Value and Distribution, by Bernard F. Haley; and Frank H. Knight, Risk, Uncertainty and Profit, Ch. III to X, incl.

[…]

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1948-49

HARVARD UNIVERSITY
ECONOMICS 202a
[Final Exam, first term]

Please write legibly

Answer four questions:

  1. Taking into account considerations suggested by Stigler in his article on “Production and Distribution in the Short Run,” describe the determination of the optimum investment in fixed equipment for a plant faced with a regular seasonal variation in output.
    Give an illustrative example.
  2. Given information about (a) changing factor prices, and (b) changing factor combinations used by an individual enterprise (operating under competitive conditions) over a certain period of time—
    explain under what conditions this information might definitely indicate the presence of genuine technological change as contrasted with passive adjustment to variable market conditions.
  3. Under what conditions could one measure the utility of alternative combinations of commodities consumed by an individual household?
    Describe in detail the process of measurement in the case where these conditions are satisfied.
  4. “A market characterized by duopolistic indeterminism can be stabilized through establishment of an official price ceiling enforced by some outside authority.” Comment.
  5. State what significant difference do you see between the theory of an individual firm as presented in Knight’s “Risk, Uncertainty and Profits” and the treatment of the same subject in the most recent literature as presented in Haley’s article on value and distribution in the “Survey of Contemporary Economics.”

Final. January, 1949.

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Economics 202b
Spring Term, 1949

Part I: General Equilibrium Theory and the Economics of Welfare

a.   Basic Concepts of a General Equilibrium Theory:

Data and variables. Price System and general interdependence. Linear model of a general equilibrium system.

Reading:

Lange, The Economic Theory of Socialism, pp. 65-72.

Cassel, The Theory of Social Economy, Vol. I, Ch. IV, pp. 134-155.

E. H. Phelps Brown, Framework of the Pricing System, in particular chapters dealing with general equilibrium theory.

Schultz, T. W.: Agriculture in an Unstable Economy, Ch. I, pp. 24-43, Ch. IV, pp. 134-153.

 

b. Economics of Welfare

Individual maximum and social welfare. Efficiency and distributive justice. Efficiency of the purely competitive system. Monopoly and economic welfare. External economies. Pricing and allocation for public enterprise.

Reading:

Hicks, J. R. : “The Foundation of Welfare Economics,” Economic Journal, December 1939, pp. 696-712.

Meade and Hitch: An Introduction to Economic Analysis and Policy, Part II, Chs. VI-VII, pp. 159-220.

Meade, J. E., and Fleming, J. M.: Price and Output Policy of State Enterprise,” Economic Journal, Vol. LIV, December 1944, pp. 321-339.

Coase, R. H.: “Note on Price and Output Policy,” Economic Journal, Vol. LV, April 1945, pp. 112-113.

 

Part II: The Theory of Distribution

 

[a. The Theory of Wages. Omitted this year.]

Demands for labor and methods of remuneration. Short run supply of labor, money and real wages. Theory of noncompetitive labor markets. Technological unemployment. Long run supply of labor and the theory of optimum population.

Reading:

Douglas, P. M.: The Theory of Wages, Ch. I, pp. 3-17; Ch. III, pp. 68-96.

Robinson, G. B. H.: Economic Fragments, “Wage Grumbles,” pp. 42-57, also reprinted in Readings in the Theory of Income Distribution.

Marx, Karl: Capital, Vol. I, Part IV, Ch. XV, pp. 405-422, 466-488.

Robbins, L.: “On the Elasticity of Demand for Income in Terms of Effort,” Economica, Vol. X, 1930, pp. 123-129.

 

b. Theory of Interest

Productivity of Capital. Expectations, risk, and uncertainty. Inventory speculation. Interest as cost and the demand for capital. Saving and the supply of capital. Monetary theory of interest. Theory of assets.

Reading:

Irving Fisher: The Theory of Interest, Chs. VII, VIII, IX, X, XI, XVI, XVII, and XVIII. 1930.

Readings in the Theory of Income Distribution (Blakiston, 1946)

F. Knight: “Capital and Interest,” pp. 384-417.

Keynes: “The Theory of the Rate of Interest,” pp. 418-424.

D. H. Robertson: “Mr. Keynes and the Rate of Interest,” pp. 425-460.

 

[c. Theory of Profits and of Rent. Omitted this year.]

Theory of residual income. Entrepreneurial function. “Normal Profits.”

Reading:

Beddy, James: Profits, Ch. X, “An Explanation of Profits,” pp. 216-266.

Crum, W. L: “Corporate Earnings on Invested Capital,” Harvard Business Review, XVI, 1938, pp. 336-350.

Kaldor, N.: “The Equilibrium of the Firm,” The Economic Journal, March 1934, pp. 60-76.

Robinson, Joan: Economics of Imperfect Competition, Ch. 8.

 

Part III: Capital and Economic Development

a. Capital and Income

National wealth: Stock and flow concepts. Dollar measures and physical measures. Capital and income. Capital in production. Depreciation and obsolescence. Period of production and the speed of turnover. The time shape of production and consumption process.

Reading:

Kuznets: “On Measurement of National Wealth,” Studies in Income and Wealth, Vol. 2, National Bureau of Economic Research, 1936, pp. 3-61.

Rae, John: New Principles of Political Economy, 1834, Chs. I-V.

Irving Fisher: Nature of Capital and Income, Chs. I, IV, V, XIV, XVII, Macmillan, 1906.

Kaldor: “Annual Survey of Economic Theory: The Recent Controversy on The Theory of Capital,” Econometrica, July 1937, pp. 201-233.

 

b. Economic Development and Accumulation of Capital

Statics and Dynamics. The general problem of economic growth. Saving, Investment and the growth of income. Acceleration principle. Technical change. Accumulation and employment.

Reading:

Bresciani-Turoni: “The Theory of Saving,” Economica; Part I, February 1936, pp. 1-23; Part II, May 1936, pp. 162-181.

Domar: Expansion and Employment,” American Economic Review, March 1947, pp. 34-55.

Schelling: “Capital Growth and Equilibrium,” American Economic Review, December 1947, pp. 864-876.

Harrod: “An Essay in Dynamic Theory,” Economic Journal, March 1939, pp. 14-33.

Pigou: Economic Progress in a Stable Economy,” Economica, August 1947, pp. 180-188.

Stern: “Capital Requirements in Progressive Economies,” Economica, August 1945, pp. 163-171.

A. Sweezy: “Secular Stagnation?” in Harris, Postwar Economic Problems, McGraw-Hill, New York, 1943, pp. 67-82.

Hansen: “Economic Progress and Declining Population Growth,” American Economic Review, March 1939, pp. 1-15.

 

Part IV: Keynesian Theory and Problems

a. Over-all outlines of the General Theory. Wage and price “stickiness.” Demand for money. Saving and “oversaving.” Multiplier principle.

Reading:

Lerner, A. P.: The Economics of Control, Chs. 21, 22, and 25.

Keynes, J. M.: General Theory of Employment, Interest and Money, Chs. 1, 2, 8, and 18.

Haberler, G.: Prosperity and Depression, Ch. 8.

 

Reading Period:

Schumpeter: Theory of Economic Development, Harvard University Press, 1936.

OR

Harrod, R. F.: Towards a Dynamic Economics, Macmillan, 1948.

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Sources:

Harvard University Archives. HUC 8522.2.1 Box 4, Folder: “Syllabi, course outlines and reading lists in Economics, 1948-1949 (2 of 2)

Wassily Leontief Papers, Harvard University Archives. HUG 4517.45, Box 2, Folder “Fall to Winter—202a ‘48-‘49”.

Image Source:  Harvard Album, 1949.

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Chicago Courses Exam Questions Syllabus

Chicago. Price Theory. Econ 300A, Friedman. 1946.

The first cohort of students to receive their graduate price theory training from Milton Friedman during the autumn quarter of 1946 at the University of Chicago (Economics 300A ) included a future Nobel prize winner (James Buchanan), a future labor economist and Chicago/Princeton professor (Albert Rees), a future textbook author (Richard Leftwich, whose text incidentally was the text used in the early concentration freshman economics course I took at Yale in the Fall semester of 1969), and Army Air Corps Silver-Star recipient and the future head of C.I.A. Soviet economics research (Rush V. Greenslade).

Interestingly enough, Milton Friedman is listed as a member of the faculty in the Announcement for the Sessions of 1946-1947 but the courses 300A, B were not yet in included in the May 15, 1946 Announcements. The readings and basic structure of the course were slightly modified from the course he offered at Columbia in 1939-40.

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[Course Description]

300A,B. Price Theory. A systematic study of the pricing of final products and factors of production under essentially stationary conditions. Covers both perfect competition and such imperfectly competitive conditions as monopolistic competition, oligopoly, and monopoly. 300A deals primarily with the pricing of final products; 300B, with the pricing of factors of production. Prereq: Econ 209 or equiv. and Econ 213 or equiv or consent of instructor.

300A. Aut: MWF 9:30; Win: MWF 10:30; Friedman.

300B. Win: MWF 9:30; Spr: MWF 9:30; Friedman.

 

Source:   University of Chicago, Announcements. Vol. XLVII, No. 4 (May 15, 1947), The College and the Divisions. Sessions of 1947-1948, p. 224.

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Econ 300 A. Autumn Quarter [1946]
Record of Meetings

[Handwritten notes by Milton Friedman]

Wed Oct 2 Qualifying exam.
Fri Oct 4 a) Marshall a la Memorials, pp. 47, 86.
b) Defn of the economic problem[,] Economics
c) Distnctn betw. positive & normative
Mon Oct 7 Knight[‘]s fcns of econ organization
Wed Oct 9 [ditto] completed
Fri Oct 11 Reln betw wants & activities
Mon Oct 14 a) Initial discussion of d. c.
Wed Oct 16 [ditto] completed
b) [Initial discussn ] of s. c.
Fri Oct 18 No meeting (to be held later
Mon Oct 21 Equil of d & s.
Wed Oct 23 Elast. of Dem
Fri Oct 25 Elast completed & assumptns ind. demand
Mon Oct 28 Ass. and dem. c. completed; stat. d.c.
Wed Oct 30 Complete statistical demand curves
Fri Nov 1 Stochastic dem. curve. d.c. of ind cons. throu m. u.
Mon Nov 4 Eqn of ind cons; math & graph. demontratn
Wed Nov 6 Dervatn of d & eng curves
Fri Nov 8 Diff with utility theory
Mon Nov 11 Indiff curve theory
Wed Nov 13 [ditto]
Fri Nov 15 Examination
Mon Nov 18 Discussion of exam: Income vs. substitution effects
Wed Nov 20 Diff with indifference theory; dem curve for prod of an indiv prod.
Fri Nov 22 Dem curve for prod of ind prod; Econ of Ind firm
Mon Nov 25 Relat of cost curves of ind foirm to supply curve of industry
Wed Nov 27 (extra meeting to make up for Oct. 18)
Reading period
Mon Dec 9 Diff kinds of monopolistic conditions
Wed Dec 11
Fri Dec 13
Mon Dec 16
Wed Dec 18 examination
Fri Dec 20 examination

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Qualifying Examination, Economics 300A
Autumn Quarter, 1946

1. Comment briefly on the following two sentences, taken from newspaper stories:

a. “Demand went up and therefore price went up.”

b. “Price went up and therefore demand declined.”

 

2. Indicate which of the following statements are true (T) and which false (F):

[T] If a one per cent increase in price will cause more than a one per cent reduction in amount demanded, the demand for the commodity is elastic.

[F] Cost of production affects price only through its effect on the rate of production.

[F] If production of a commodity is completely monopolized, and if the monopolist takes full advantage of his position, no changes in the cost of production will have any effect upon price.

[F] A fixed tax (say, a license tax of $10,000) would operate to increase the price at which a monopolist would make the largest net return (or largest net earnings).

[blank] An individual firm will undertake to equalize marginal revenue and marginal cost.

[F] An excise tax is likely to increase the price of a competitively produced commodity by the full amount of the tax.

[T] If price exceeds the competitive producer’s average expense it will therefore be advantageous for him to increase his rate of production.

[T] A monopoly will never operate at a price at which the demand of its product is inelastic.

 

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[undated copy of a class handout, ca. 1946-47]

An arithmetical example of the effects of changes in tastes and the distribution of income on the distribution of commodities.

1. Descriptive data:

a. Population. There are three classes in the community—rich, middle-class, and poor. Their numbers are fixed throughout the example, but their incomes vary. The numbers and original family incomes are:

Rich: 1,000 families, $10,000 income

Middle-class: 10,000 families, $3,000 income

Poor: 1,000 families, $1,000 income

b. Commodities. There are two commodities: housing; and all other, which will be treated as a single commodity.

c. Tastes. In the original position the tastes of all income classes are identical. The tastes are described by the following schedules of marginal utilities, which, it will be noticed, follow the Bernoulli hypothesis. (It will be observed also that the analysis is independent of the measurability of utility. Marginal utilities are used only for simplicity of exposition. If the student will triple the marginal utilities for one income class and carry through the analysis, he will reach the same answers, assuming he does not make arithmetical mistakes.)

 

Housing

Other

Quantity

 Marginal Utility Quantity

Marginal Utility

1

 1.00 1

1.00

2

 0.50 2

0.50

3

 0.33 3

0.33

4

 0.25 4

0.25

5

 0.20 5

0.20

Additional values can be found for either schedule from the formula, marginal utility = 1/quantity.

 

2. The Original Distribution of Goods.

a. Each family will seek maximum utility, and this entails buying housing and other commodities in such quantities that

marginal utility of housing = marginal utility of other
  price of housing                                 price of other

In addition each family is faced by the budget limitation that the amount spent on housing plus the amount spent on other equal income.

b. We can construct a demand curve for (say) housing by (say) the poor, using arithmetical procedures.

i. First divide the marginal utilities of housing and other by their unit prices. Let these prices be $2 per unit and $1 per unit, respectively. We secure schedules:

Housing

Other

Quantity

 Marginal Utility
Per Dollar		 Quantity

Marginal Utility
Per Dollar

1

 0.500 1

1.00

2

 0.250 2

0.50

3

 0.167 3

0.33

4

 0.125 4

0.25

5

 0.100 5

0.20

 

ii. Then find the combinations such that the marginal utility per dollar is equal. For example, 1 housing unit and 2 other units; 2 housing units and 4 other units. Only one of these many combinations meets our budget limitation, that the poor family spend $1,000. Continuing the table or the logic, the family will buy 250 housing units if the prices are as given.

iii. Carry this procedure through for all possible prices of housing and other, for each income class.

iv. Add the demand schedules so secured, compare with the given supplies, read off prices, and then the quantities received by each type of family.

v. Since steps iii and iv will require several years, it is more economical to take a course in sub-freshman algebra and proceed as follows:

c. Our two conditions of proportionality of marginal utilities to prices and the budget limitation can be written as

1/(q1p1) = 1/(q2p2)

q1p1 + q2p2 = R,

where q1 is the quantity of housing, p1 its price, the corresponding symbols with subscript 2 refer to other, and R is income.

We then proceed deftly as follows:

i. The demand curve for housing by a family is the quantity that will be purchased at various prices, so we wish to find how q1 varies with p1. If we substitute the proportionality-of-marginal-utilities equation into the budget equation, we secure

q1p1 + q1p1 = R,

or q1=R/(2p1).

By symmetry the same demand curve holds for other, using subscript 2.

ii. We now add up the demand curves of all families. The aggregate demand of the 1,000 rich families is

1,000 x 10,000/(2p1) = 5,000,000/p1

that of the middle class,

10,000 x 3,000/(2p1) = 15,000,000/p1

and that of the poor, starving families is

1,000 x 1,000/(2p1) = 500,000/p1.

iii. The fixed supply of both housing other is 205,000 units. The price is set where quantity supplied equals quantity demanded, i.e.,

205,000 = 20,500,000/ p1

so the price of housing (and of other) will be $100.

iv. And now by going back to demand curves, in i above, we can find the quantity each family secures of each commodity.

d. The final answers are:

i. The rich family secures $10,000/(2x$100) = 50 units of housing and 50 units of other.

ii. The middle class family secures $3,000/(2x$100) = 15 units of housing and 15 units of other.

iii. The poor family secures $1,000/(2x$100) = 5 units of housing and 5 units of other.

3. After the War: Larger Money Incomes and a More Equal Distribution of these Incomes.

a. Let us assume that after a highly successful war, this community now has the following income structure:

Rich: 1,000 families, $18,000 income

Middle-class: 10,000 families, $6,000 income

Poor: 1,000 families, $4,000 income

Thus the aggregate money income of the community has doubled, but is now more equally distributed by any reasonable measure.

b. We proceed to the solution exactly as before. Indeed nothing has changed but the incomes of individual families so we may use the same demand equations.

c. The final answers are:

i. The rich family secures 45 units of housing and 15 units of other.

ii. The middle-class family secures 15 units of housing and 15 units of other.

iii. The poor family secures 10 units of housing and 10 units of other.

The price per unit of either commodity has risen to $200.

4. Still After the War: The Rich get House-Conscious

a. For various reasons best left unexplored, the rich acquire a greater desire for housing. In terms of our example, the marginal utility of any quantity of housing doubles for them (so marginal utility = 2/q). We proceed as usual.

b. The final results are:

The price of a unit of housing soars to $214.63; that of a unit of other commodities crashes to $185.37.

i. The rich family secures 55.91 units of housing and 32.37 units of other commodities.

ii. The middle-class family secures 13.98 units of housing and 16.18 units of other commodities.

iii. The poor family secures 9.32 units of housing and 10.79 units of other commodities.

5. The Final Comparison

Original
Position

Greater Equality

Same Tastes

Rich-roof-ravenous

Housing

Rich

 50,000 45,000

55,000

Middle-class

 150,000 150,000

139,800

Poor

 5,000 10,000

9,300

Other Commodities

Rich

 50,000 45,000

32,400

Middle-class

 150,000 150,000

161,800

Poor

 5,000 10,000

10,800

_________________________________

MIDQUARTER EXAMINATION IN ECONOMICS 300A
Autumn, 1946

1. Descriptive data:

a. Population: a community consists of three classes—rich, middle-class, and poor. The numbers and family incomes are:

Rich: 1,000 families, $10,000 income per family.

Middle-class: 10,000 families, $3,000 income per family.

Poor: 1,000 families, $1,000 income per family.

b. Commodities: There are two commodities: housing and food, considered as single composite commodities.

c. Demand curves: All individuals in the community have the following demand curves:

h = I/(2 ph)

f = I/(2 pf)

where

h= number of housing units per time unit.

ph = price per housing unit.

f = number of food units per time unit.

pf = price per food unit.

I = income of the family per time unit.

d. Supplies available.

There are available 205,000 housing units, and 205,000 food units. These amounts are available regardless of price and cannot be increased in the period considered.

Questions:

Determine:

a. The aggregate demand curve for the entire community for (1) housing, (2) food.

b. The prices that will prevail, assuming a free market.

c. The quantity of food and housing consumed by a family of each class.

d. The elasticity of the market demand curve for each product at a quantity of 205,000 units.

 

2. Appraise the following quotation from A. C. Pigou: “Since elasticity measures variations in quantity (demanded or offered) divided by variations in a price, the elasticity of demand for anything will be seven times as large for seven similar demanders as it is for one.”

 

3. “As Sir R. Giffen has pointed out, rise in the price of bread makes so large a drain on the resources of the poorer laboring families and raises so much the marginal utility of money to them, that they are forced to curtail their consumption of meat and the more expensive farinaceous foods: and, bread being still the cheapest food which they can get and will take, they consume more, and not less of it.” Marshall, p. 132.

a. Give your own verbal explanation of how such a positively sloping demand schedule can arise.

b. Draw an indifference curve diagram that will display this phenomenon.

_________________________________

Final Examination for Economics 300A
Autumn, 1946
Part I

1. Define briefly the following terms:

a. Income elasticity of demand

b. Demand curve for the product of an individual firm

c. Supply curve

d. Marginal revenue

e. Cross elasticity of demand

f. Oligopoly

 

2. Discuss critically the following quotation from Stigler:

“The principle of an increasing Syx [the marginal rate of substitution of y for x] corresponds to the older theory of diminishing marginal utility of a commodity as its quantity increases. More precisely: if Syx is increasing, then the marginal utilities of y and x must be decreasing; if the marginal utilities of y and x are decreasing, then Syx is probably, but not necessarily, increasing.”

3. Assume that the demand curve for complete flashlights of a standardized type is known; that the case and bulb are produced separately from the batteries; that the cost of putting the batteries in the case can be neglected; that the number and type of batteries put in each flashlight is fixed and unchangeable; that the supply curves of (1) case and bulb assembly and (2) batteries are known; and that the markets for complete flashlights, case and bulb assemblies, and batteries are reasonably competitive.

a. Indicate how to derive the demand curve for batteries alone. Under what assumptions is this demand curve valid; and for what kinds of problems is it relevant?

b. Suppose the supply curve of case and bulb assembly shifts to the right (i.e., supply increases). What effect will this have on the price of batteries?

c. Under what conditions would you expect the derived demand curve for batteries to be extremely inelastic?

_________________________________

Final Examination for Economics 300A
Autumn, 1946
Part II

4. Statistical demand curves for fluid milk are derived by two different procedures.

(1) Data for a particular year for the 48 states of the United States are used to obtain a correlation equation expressing (a) the price of fluid milk in a state as a function of (b) per capita consumption of fluid milk in that state and (c) per capita income in that state.

(2) Data for a period of years for the United States are used to obtain a correlation equation expressing (a) the price of milk in the United States as a function of (b) the per capita consumption of fluid milk in the United States and (c) the per capita income in the United States.

Under what conditions, if any, would you expect the results to be identical? If the results are not identical, discuss the relative advantages and disadvantages of each. Indicate the conditions under which you would expect (1) to give a better estimate of “the” demand curve for milk and, the conditions under which you would expect (2) to give a better estimate. How, if at all, could one determine which set of conditions prevails.

5. “In conversations with gold mining engineers a phrase glibly and frequently repeated is ‘sweetening the ore.’ By this phrase reference is made to the practice of diverting production in profitable periods to the poorer ores and perhaps restricting output in the richer fields. Under this practice the better ores are preserved for periods in which mining costs have risen so that over a long period of time output can be held more steady. Contributing also to a policy of sweetening the ores is the reluctance of producers to install capital equipment in a period in which the tendency is for mining expenses to increase with the general advance of wages and living costs. By the time the equipment is installed it might be expected that wages and price levels would be adjusted to the increased price of gold.”

Discuss the wisdom of the policy described in this quotation from the point of view of the individual producer. Assume that the individual producer seeks to maximize the present net capital value of his mining properties. Discuss separately (a) the alleged policy of “diverting production in profitable periods to the poorer ores and perhaps restricting output in the richer fields”; (b) the alleged policy of postponing the installation of capital equipment.

6. Assume a change in the laws so that less stringent conditions are imposed for bankruptcy and reorganization in a particular field (say the production of steel). As a consequence, a number of steel firms reorganize, wiping out a large part of their bonded debt. What would you expect to be the short- and long-run effects of these events on (a) the output and prices of the reorganized firms; (b) the amount of investment in the industry; (c) the rate of interest paid by the industry for new loans; (d) the output and prices of the industry? In each case, give the basis for your answer.

_________________________________

Source: Hoover Institution Archive. Milton Friedman Papers, Box 76, Folder 9 University of Chicago Econ. 300A.

Image Source: Columbia University, Columbia 250 Celebrates Columbians Ahead of Their Time.

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Courses Exam Questions Harvard Syllabus

Harvard. Intro to Mathematical Economics. Schumpeter, Leontief 1935-42

Graduate classes in Mathematical Economics (Econ 13b in 1934-35, Econ 104b in later years) were taught every second year by Edwin Biddle Wilson (1934-35, 1936-37, 1938-39, 1940-41, 1942-43). An introduction for undergraduates and graduates was offered by Joseph Schumpeter in 1934-35 (Econ 8a), but the course was taken over and offered for nearly a decade by Wassily Leontief (new course number beginning 1936-37, Econ 4a). In this posting you will find different scraps from the Schumpeter/Leontief course over the years.

 

____________________________

[Schumpeter’s exam questions (1934-35)]

[Note these exam questions are in the Ec11 Folder. Instructor: Schumpeter according to course catalogue]
[Introduction to the Mathematical Treatment of Economic Theory, 1934/35 academic year]

 

Ec 8a
Midyear Exam Febr 4th 1935

Answer at least three of the following questions:

  1. Define elasticity of demand, and deduce that demand function, which corresponds to a constant coefficient of elasticity.
  2. Let D be quantity demanded, p price, and D = a – bp the demand function. Assume there are no costs of production. Then the price p0 which will maximize monopoly-revenue is equal to one half of that price p1, at which D would vanish. Prove.
  3. A product P is being produced by two factors of production L and C. The production-function is P = bLkC1-k , b and k being constants. Calculate the marginal degrees of productivity of L and C, and show that remuneration of factors according to the marginal productivity principle will in this case just exhaust the product.
  4. In perfect competition equilibrium price is equal to marginal costs. Prove this proposition and work it out for the special case of the total cost function
    y = a + bx, y being total cost, x quantity produced, and a and b
  5. If y be the satisfaction which a person derives from an income x, and if we assume (following Bernoulli) that the increase of satisfaction which he derives from an addition of one per cent to his income, is the same whatever the amount of the income, we have dy/dx = constant/x.
    Find y. Should an income tax be proportional to income, or progressive or regressive, if Bernoulli’s hypothesis is assumed to be correct, and if the tax is to inflict equal sacrifice on everyone?

[Following derivation added in pencil]
{{p}_{1}}=\frac{a}{b}

\frac{dp}{dD}=-\frac{1}{b}

\frac{d\,\,Dp}{dp}=D+p\frac{dD}{dp}=

=a-bp-bp=a-2bp

\therefore p=\frac{a}{2b}

Source: Harvard University Archives. Joseph Schumpeter Lecture Notes HUC(FP)–4.62, Box 9, Folder: “Ec 11 Fall 1935”.

 

Transcription of Schumpeter’s official typed version of the Economic 8a, 1934-35.

____________________________

[1935-36]

*Economics 8a 2hf. Introduction to the Mathematical Treatment of Economics
Half-course (second half-year). Mon. 4 to 6. Assistant Professor Leontief. [Course may be taken by either undergraduates or graduates for credit.]

Economics A [Principles of Economics] and Mathematics A, or their equivalents, are prerequisites for this course.

 

Source: Harvard University. Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences for the Academic Year 1935-36 (2nd edition), p. 138.

____________________________

[Excerpt from undated lecture notes, in Folder “Introduction mathematical economics 1937”]

Intr. to Math. Ec.

Introduction

Math. Ec. Economics & Mathematics

I. The subject of m.e. and Economic Theory is the same.

MathEconVennDiagram

  1. Parts of Economics – non-quantitative in character.
  2. Parts of Economics—quantitative but can be handled without math symbols. (marg. cost [unclear word].
  3. Quantitative—of such complexity that it hardly can be handled without math. symbols (f. ex. general equilibrium distribution etc.)

Fundamental difference only in the method of handling.

Non-math economists “are mathematicians without knowing it”

 

II. Two application of math. in economics.

a) theory b) statistics

Difference in application of math to economic theory and f.ex. to physics: More general type of argument Instead of definite interrelation we have knowledge only of some characteristics.

Math economics is not imitation of physics.

 

III. Fundamental problem of math. ec.:

Translation of economic problems into mathematical terms and back. Math. economist must know economics and mathematics.

In math. econ. To formulate a problem means to solve it.

IV. The aim of this course is to

  1. teach you to apply math. to the analysis of theor. ec. problem.

Mostly we will dwell in “region 2” although some time we will advance into the “region 3”.

Main subjects.

Theory of value.

Theory of production.

  1. Procedure:

a) lecture on fundamental problem

b) Discussion of special applications

c) Solution of problems out of class.

3. Knowledge of math:

a) elementary algebra

b) elementary calculus

c) partial derivatives

Knowledge of ec.

Ec A [Principles of Economics].

4. Graphic analysis vs. calculus.

Graphic analysis is a summary which helps us to talk of.

 

V.  Literature

  1. Antoine A. Cournot (1801-1877).
    “Researches into the mathematical principles of the theory of wealth” (1838)

Léon Walras (1834-1910).
“Elements of pure political economy” (1874-1877)

Vilfredo Pareto (1848-1923)
“Cours d’Economie Politique” (1896)
“Manuale d’economiea politica” (1906)

  1. Irving Fisher
    “Mathematical Investigations in the Theory of value and prices” (1892)
    F. Y. Edgeworth (1845-1926)
    Alfred Marshall (1842-1924)  “Appendix to the Principles”

Italian School
“Econometrica”
“Review of Economic Studies”
etc.

  1. No good textbook

A. L. Bowley
“The Mathematical Groundwork of Economics”, 1924.

Evans
“Introduction into mathematical economics”.

Source: Harvard University Archives. Wassily Leontief Papers. HUG 4517.30, Box 5, Folder “Introduction to Mathematical Economics (notes)”.

____________________________

[Reading Period assignment: 1936, Leontief ]

Economics 8a: Evans, G. C., Mathematical Introduction to Economics, Chs. I and II.

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. HUC 8522.2.1, Box 2, Folder “1935-1936”.

____________________________

[Course Final Exam 1936, Leontief]

[carbon copy]

1935-36

HARVARD UNIVERSITY
ECONOMICS 8a2

 

Answer THE FIRST and at least THREE of the subsequent questions:

  1. Discuss the relation between the cost function and the production function of a single enterprise.
  2. Prove that in the point where the average unit costs are the smallest, they are equal to the marginal costs.
  3. Given a total revenue curve, R = Aq –Bq2, and a total cost curve, C= K + Lq, find the monopoly output, the monopoly price and the net revenue of monopolist. (A, B, K, and L are constants.)
  4. Discuss Cournot’s analysis of competition between two monopolies (duopoly).
  5. Given the production function Z = x½ y½ find out whether the two factors x and y are complementary or competing.
  6. Derive the relation between factor prices and marginal productivities under conditions of free competition (fixed prices).

Final   1936

 

Source: Harvard University Archives. Wassily Leontief Papers. Box 5, Folder “(notes Introduction to Mathematical Economics”

____________________________

[Reading Period assignment: 1937, Leontief ]

 Economics 4a:

A. Cournot, Researches into Mathematical Economics.

Ch. IV, pp. 44-55;
Ch. V, pp. 56-61.
Ch. IX, pp. 99-107.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. HUC 8522.2.1, Box 2, Folder “1936-1937”.

____________________________

[Reading Period assignment: 1938, 1939, 1940, Leontief]

Economics 4a: Read the following

  1. Cournot, Researches into Mathematical Economics. Chs. IV, V, VII, VIII, IX.
  2. Evans, Mathematical Introduction to Economics, Ch. II.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. HUC 8522.2.1, Box 2, Folders “1937-1938”, “1938-39”, “1939-40”.

____________________________

[Course Outline, Leontief]

Economics 4a
1939-40
Introduction to the Mathematical Treatment of Economic Theory

 

Introductory remarks. The profit function and the profit tax. The cost function; total, fixed, variable, marginal and average costs. Minimum average total and minimum average variable costs. General properties and the cost function. Aggregate cost function of a multiple plant enterprise.

The revenue function, the demand function and the price. Marginal revenue and elasticity concept. Principle of dimensional transformation. Conditions for the existence of an individual supply function.

Introduction into the theory of the markets. Necessary and sufficient conditions for the existence of market supply and market supply functions. Competition and monopoly. Theory of discrimination.

Introduction into the study of the production function. Marginal productivity, increasing and diminishing returns. Complementary and competing factors. Principle of minimum costs. Cost function and production function.

Introduction into the theory of consumers behavior: Concept of the indifference varieties.

Introduction into the analysis of dynamic economies. The cobweb problem and basic equilibrium concepts.

Introduction into the theory of general interdependence. Data and variables, basic equations and unknowns.

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. HUC 8522.2.1, Box 2, Folder “1939-1940”.

____________________________

[Course Outline, Leontief]

Economics 4a
1941-42 [also for 1942-43]

 

  1. Introductory remarks.
    The profit function.
    Maximizing profits.
  2. The cost functions: Total costs, fixed costs, variable costs, average costs, marginal costs, increasing and decreasing marginal costs.
    Minimizing average total and average variable costs.
  3. The revenue function.
    Price and marginal revenue.
    Demand function
    Elasticity and flexibility.
  4. Maximizing the net revenue (profits).
    Monopolistic maximum.
    Competitive maximum.
    Supply function.
  5. Joint costs and accounting methods of cost imputation.
    Multiple plants.
    Price discrimination.
  6. Production function.
    Marginal productivity.
    Increasing and decreasing productivity.
    Homogeneous and non-homogeneous production functions.
  7. Maximizing net revenue, second method.
    Minimizing costs for a fixed output.
    Marginal costs and marginal productivity.
  8. Introduction into the theory of consumers’ behavior.
    Indifference curves and the utility function.
  9. Introduction to the theory of the market.
    Concept of market equilibrium.
    Duopoly, bilateral monopoly.
    Pure competition.
  10. Cobweb problem.
  11. Introduction into the theory of general equilibrium.

 

Reading: R. G. D. Allen, Mathematical Analysis for Economists.

Evans, Introduction into Mathematical Economics.

Antoine Cournot, Researches into the Mathematical Principles of the Theory of Wealth.

Weekly problems.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. HUC 8522.2.1, Box 3, Folders “1941-1942”. “1942-1943 (1 of 2)”.

____________________________

[Reading Period assignment: 1942, Leontief]

 

Evans, Introduction into Mathematical Economics. Ch’s I, II, III

Antoine Cournot, Researches into the Mathematical Principles of the Theory of Wealth. pp. 44-55, 56-66, 99-107.

Econ. 4.[a]

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. HUC 8522.2.1, Box 3, Folder “1941-1942”.

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Courses Exam Questions Harvard

Harvard. Advanced Economic Theory, Schumpeter, 1941-42

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the list of “artifacts” from the history of economics I have already assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment below….

______________________

According to the Presidential Report of Harvard University, in 1941-42 nine graduate students were enrolled in Joseph Schumpeter’s full-year course, Economics 103, Advanced Economic Theory. Reading lists and exam questions are provided here for both semesters.

 ________________________________

[Course Announcements 1941-42]

For Undergraduates and Graduates

The Courses for Undergraduates and Graduates, unless otherwise stated, are open only to students who have passed in Course A [Principles of Economics]

[…]

*Economics 1. Economic Theory

Mon., Wed., and (at the pleasure of the instructors) Fri., at 11. Professor Chamberlin, Dr. O. H. Taylor, and Associate Professor Leontief.

This course will be conducted mainly by discussion. It is open only to candidates for the degree with honors.

[…]

*Economics 103. Advanced Economic Theory

Tu., Th., and (at the pleasure of the instructor) Sat., at 10. Professor Schumpeter.

Economics 1, or an equivalent training, is a prerequisite for this course. It may be taken as a half-course in either half-year.

Source: Official Register of Harvard University, Vol. 38, No. 11 (March 19, 1941). Provisional Announcement of the the Courses of Instruction offered by the Faculty of Arts and Sciences during 1941-42, pp. 56-59.

________________________________

ECONOMICS 103
Program of Course and Reading List
1941-42

This course is to serve the two purposes, first, of a critical survey of “traditional” (Marshall-Wicksell) theory as improved by later work on the same lines; second, of an introduction into modern “dynamics” and into the problems arising out of the necessity of fitting theory to time-series material. The first purpose will be dominating in the work of the first, the second in the work of the second semester.

First Semester

 

I. Preliminaries. The nature of economic variables and equilibria. Various meanings of Stability. Structural and confluent relations. Statics and Dynamics vs. stationary and evolutionary states. Comparative Statics. One to two weeks.

No reading assignments.

II. Monetary and “real” processes. Aggregative Models. One to two weeks.

Keynes, General Theory.

Lange, “The rate of interest and the optimum propensity to consume,” Economica, February 1938.

III. The (traditional) theory of the individual household and the individual firm.

Rest of semester.

The background of this theory is Marshallian. Marshall’s Principles and Wicksell’s Lectures, Vol. I, should be thoroughly familiar to, and frequently referred to, by every student. No specific references will hence be made to them in what follows. In addition, general reference is here made to:

J. R. Hicks, Value and Capital.
E. H. Chamberlin, The Theory of Monopolistic Competition.

A. Walras’ static equilibrium relations. One week.

No additional reading (but refer to Wicksell and Hicks).

B. Statics of the family budget. Indifference maps. Engels curves. Two weeks.

Hicks, first part.
Frisch, New Methods of Measuring Marginal Utility (1932).
Suggestion: Allen and Bowley, Family Expenditure, 1935.

C. Statics of the individual firm. Production functions and isoquants. Cost calculation. Depreciation. The Marshallian supply curves. Two weeks.

Kaldor, “The Equilibrium of the Firm,” Economic Journal, 1934.
Machlup, “The Common Sense of the Elasticity of Substitution,” Review of Economic Studies, 1935.
Sraffa, “The Laws of Return under Competitive Conditions,” Economic Journal, 1926.
Robinson, “Imperfect Competition and Falling Supply Price,” Economic Journal, 1932.
Robinson, “What Is Perfect Competition?,” Quarterly Journal of Economics, 1934.
Viner, “Cost and Supply Curves,” Zeitschrift für Nationalökonomie, 1931.
Kahn, “Some Notes on Ideal Output,” Economic Journal, 1935.

D. Problems of monopolistic and oligopolistic price policy. Oligopoly and bilateral monopoly. Discrimination. Two weeks.

Hicks, “The Theory of Monopoly,” Econometrica, 1935.
Lerner, “The Concept and Measurement of Monopoly Power,” Review of Economic Studies, 1934.
Robinson, Economics of Imperfect Competition, Books II, IV, V.
Leontief, “The Theory of Limited and Unlimited Discrimination,” Quarterly Journal of Economics, 1934.

E. Locational Problems. One week.

Hotelling, “Stability in Competition,” Economic Journal, 1929.
Hoover, Location Theory and the Shoe and Leather Industries, Harvard Economic Studies, No. LV.

Reading Period Suggestion:

A. C. Pigou, Employment and Equilibrium, 1941.

Source: Harvard University Archives. HUG(FP)—4.62. Joseph Schumpeter Papers, Box 12, Folder: “Ec 103, Fall 1942”

________________________________

1941-42
Harvard University
Economics 103

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

  1. Define the nature of economic equilibria. Give examples of the various types of them. Distinguish between equilibrium, determinateness, and stability.
  2. Explain the difference between Dynamics and Comparative Statics. In what respects do you consider the first approach to be superior to the second?
  3. Keynes’ General Theory, as thrown into a system of equations by Oscar Lange, purports to give a model of the economic process. So does the system of equations written by Walras. What are the principal differences between the two and what do you think of their relative merits a) in general, b) with respect to particular set of problems?
  4. We have replaced the old concept of marginal utility by the concept of marginal rate of substitution. What were the reasons for this and what have we gained thereby?
  5. Define the surface of consumption and discuss the three curves which are traced out by the sections of that surface by planes perpendicular to the three axes.
  6. What is meant by elasticity of substitution? And what are the principal uses for this concept?
  7. Explain the nature of a linear production function that is homogeneous of the first degree and state the reasons why many economists are so partial to it. Should we, or should we not, make that particular assumption about the form of our production functions?
  8. In what sense is it time to say that, in framing a rational price policy, firms should take no account of overhead but only of marginal cost?

Mid-Year, 1942.

Source: Harvard University Archives, HUG(FP)-4.62. Joseph Schumpeter Papers, Box 4, Folder “Ec 103, Sp & Fall 41-42”.

________________________________

Economics 103
Program of Course and Reading List
1941-42
Second Semester

I

The work of this semester is, first, to complete the critical survey of “traditional” (Marshall-Wicksell) theory begun in the first semester; and to deal with modern “dynamics” and some of the problems arising out of the fact that economic theory is under the necessity of using time-series material. The general background will be supplied, as it has been in the first semester, by the following treatises to which no further reference will be made in this Reading List:

Alfred Marshall, Principles.
Knut Wicksell, Lectures, Vol. I.
Edward H. Chamberlin, Theory of Monopolistic Competition.
J. R. Hicks, Value and Capital.
J. M. Keynes, General Theory of Employment, Interest and Money.

II

Not assigned, nor necessary in order to fulfill course requirements, but suggested are the following works (this suggestion also covering the usual Reading Period assignments):

A. C. Pigou, Employment and Equilibrium, 1941.
Erik Lundberg, Studies in the Theory of Economic expansion, Stockholm Economic Studies, 1936).
J. Tinbergen, Statistic Testing of Business-Cycle Theories, II, Business Cycles in the United States of America: 1919-1932, League of Nations, Geneva, 1939. (This work, which may seem to be far removed from the field of pure theory, nevertheless constitutes a most important contributions to it.)

III

(1) Distinction between Dynamics and the Theory of Economic Development. Disturbances, Transitional States, and the Long-Run Normal. Economic Hysteresis and Walras Reaction. Microdynamic and Macrodynamic Models.

No reading assignments.

(2) Lagged Reaction. The Hog-Cycle Case. (Cobweb). Buyers reacting to current price, sellers reacting to a previous price. The case of durable goods; the shipbuilding cycle.

(Tinbergen: Ein Schiffbauzyklus? Weltwirtschaftliches Archiv, July, 1931, not assigned.)

(3) Other “dynamising” factors: reaction to current rate of change of price; reaction to weighted average of past prices. Friction. The Theory of Expectations.

N. Kaldor, “Speculation and Economic Stability,” Review of Economic Studies, October, 1939.
L. M. Lachmann, “Uncertainty and Liquidity Preference, “ Economica, August, 1937.
F. A. von Hayek, “Economics and Knowledge,” Economica, February, 1937.
F. Lavington, “An Approach to the Theory of Business Risks,” Economic Journal, June, 1925.

(4) Statistical Demand and Cost Curves.

Henry Schultz, Statistical Laws of Demand and Supply, 1928. (This will stand instead of the much more significant, but also much more difficult work of the same author: Theory and Measurement of Demand, 1940.
Joel Dean, The Relations of Cost to Output (National Bureau of Economic Research, Technical Paper No. 2, 19).

(5) Problems of Price Policy.

(See First-Semester Reading List, III/D.)

(6) Some Aspects of the Theory of Capital and interest.

G. Mackenroth, “Period of Production, Durability and the Rate of Interest,” Journal of Political Economy, December, 1930.
F. H. Knight, “Capital, Time, and the Interest Rate,” Economica, August, 1934.
F. Machlup, “Professor Knight and the Period of Production,” Journal of Political Economy, October, 1935.
John B. Canning, The Economics of Accountancy, 1929. (Chapter on Depreciation.)
Irving Fisher, The Theory of Interest, 1916.

(7) Some Macrodynamic Models

F. R. Harrod, “An Essay in Dynamic Theory,” Economic Journal, March, 1939.
N. Kaldor, “A Model of the Trade Cycle,” Economic Journal, March 1940.
M. Kalecki, “A Theory of the Business Cycle,” Review of Economic Studies, February, 1937. (Reprinted in Essays on the Theory of Economic Fluctuations.)
(R. Frisch, “Impulses and Propagation Waves,” Essays in Honor of Gustaf Cassel; technically difficult.)

Source: Harvard University Archives. HUG(FP)—4.62. Joseph Schumpeter Papers, Box 12, Folder: “Ec 103, Fall 1942”

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1941-42
Harvard University
Economics 103

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

  1. Consider the micro-dynamic model which is usually referred to as the “cobweb” pattern. Explain the commonsense of the underlying theory. Discuss its value in interpreting reality.
  2. A dynamic model may yield damped, stationary or anti-damped (explosive) solutions. Should we exclude the anti-damped ones on the ground that they are unrealistic because as a matter of fact economic patterns do not explode?
  3. In what sense can it be said that increasing returns are incompatible with perfect (pure) competition?
  4. Assume that the only purpose of the Practice of Depreciation is to allocate the costs of durable instruments of production among the periods of account (“years”) covered by the service life of those instruments. Given that purpose, what is the correct principle of figuring out the amount of depreciation?
  5. State the classical (Marshallian) theory of the influence of commodity speculation (trade in futures) on the time-shape of values (fluctuations in prices and in quantities sold). How does modern theory differ from that picture? What is your own opinion about the influence of speculation?
  6. Let a statistical demand curve be derived by plotting the prices of a commodity, divided by a wholesale price index, against the corresponding amounts of its per capita consumption. What do you think of such a procedure and how would you judge such a demand curve?
  7. If a firm owns several plants, how will it distribute a given amount of output among them?
  8. Show that, in the absence of further information, price is indeterminate in the case of Bilateral Monopoly.

Final, 1942.

Source: Harvard University Archives, HUG(FP)-4.62. Joseph Schumpeter Papers, Box 4, Folder “Ec 103, sp & Fall 41-42”.

Categories
Courses Exam Questions Harvard

Harvard. Principles of Sociology Exam. First Semester, Carver 1922-23.

In the previous post we have a syllabus with links to the assigned readings for the full-year course Economics 8, Principles of Sociology, taught at Harvard by Professor Thomas Nixon Carver. This copy of the printed exam questions for the first term of the academic year 1922-23 was found in the papers of Vernon Orval Watts in the Hoover Institution archives.  The examination questions for the final examination for the second semester has been posted as well.

Watts’ own notes for the course are for following academic year. A brief c.v. for Watts and his obituary from the Los Angeles Times provide some biographic detail for Vernon Orval Watts. He was awarded a Ph.D. from Harvard in 1932 in economics for the dissertation “The development of the technological concept of production in Anglo-American Thought.” His autobiography Recollections of an Unplanned Life is available to read on-line at hathitrust.org.

From Watts’ course notes we can see the following major differences between the 1917-18 syllabus and what was taught in 1923-24.

  • More chapters in Lucius Moody Bristol’s Social Adaptation were discussed in the lectures (Watts’ papers included his notes on Chapters 1-13);
  • Added were the published Sigma Xi Lectures delivered at Yale University, 1921-22 (George Alfred Baitsell, ed., The Evolution of Man. New Haven, Yale University Press, 1922);
  • Added for the second term was the newly published textbook by Frederick A. Bushee, Principles of Sociology. New York: Henry Holt & Company, 1924.

Watts’ course notes also show that Carver still assigned the vast bulk of his book of readings in sociology (Sociology and Social Progress, 1905) as well as a collection of his essays published in 1915. Indeed it appears to me that reading the first 13 chapters of Bristol and these two Carver books would have been quite sufficient for a student to get a good grade in the course.

_________________________________

1922-23
HARVARD UNIVERSITY
ECONOMICS 8

  1. Would you call sociology a branch of economics or economics a branch of sociology? Explain why.
  2. How would you determine whether a given social change is progressive or not?
  3. Do men work together in groups because they are socially minded, or do they become socially minded because it pays economically to work together in groups?
  4. What are the chief eugenic agencies now at work in this country? Defend your answer.
  5. What are the chief dysgenic agencies now at work in this country? Defend your answer.
  6. To which group of factors, the moral or the intellectual, does Buckle attach the greater importance in the promotion of civilization? Why?
  7. What are meant by “self-appraisal,” “consciousness of kind,” sympathy, and imitation, and how is each related to the process of socialization?
  8. How are “self-appraisal” and “consciousness of kind” related to what is known as the race problem?
  9. How does Ross dispose of the “economic interpretation of history”?
  10. Discuss the question: Are human instincts the primary social factors?

Mid-Year. 1923.

 

Source: Hoover Institution Archives. Papers of V. Orval Watts, Box No. 8. Folder: “Harvard Univ. 1922-23 Notes on readings”.

 

 

Categories
Courses Curriculum Exam Questions Harvard

Harvard Courses in Political Economy, 1874-75

Excerpts from the Harvard Catalogue for 1874-75 with principal texts and examination questions for political economy together with some information about the A.B. distinction between “prescribed” and “elective” studies.

Incidentally, one finds that annual fees for a full course load at Harvard ran $120/year and a copy of John Stuart Mill’s Principles cost $2.50. Cf. today’s Amazon.com price for N. Gregory Mankiw’s Economics which is $284.16. If tuition relative to the price of textbooks had remained unchanged (and the quality change of the Mankiw textbook relative to Mill’s textbook(!) were equal to the quality change of the Harvard undergraduate education today compared to that of 1874-75(!!)), Harvard tuition would only be about $13,600/year today instead of $45,278. Just saying.

_________________________________

HARVARD COURSES OF INSTRUCTION 1874-75

COURSE OF STUDY
FOR THE DEGREE OF A.B.

The course of study to be pursued by a candidate for the Bachelor’s degree is made up in part of studies which are prescribed, and pursued by all students alike, and in part of studies selected by the student himself out of the various courses of instruction which are given in the College.

PRESCRIBED STUDIES.

The prescribed studies occupy the whole of the Freshman year and about one-third of the Sophomore and Junior years. In the Senior year only certain written exercises are prescribed.

Anticipation of Prescribed Studies.

The prescribed studies of the Sophomore and Junior years being of an elementary character, students who wish to be relieved from attendance at College exercises in one or more of them will be excused from such attendance, if they pass a satisfactory examination in such study or studies at the beginning of the year in which they would regularly pursue the study or studies in College, or at the time of their examination for admission to College. Studies which are pursued only in the second half-year may also be anticipated in the same way in the middle of the year. No such examination will be deemed satisfactory unless the student shall succeed in obtaining at least one-half of the maximum mark. The mark obtained when the examination is successful will be credited to the student as his mark on the Annual Scale of the study which forms the subject of the examination. Preparation for these examinations can often be made while the student is preparing for College or in the long vacation, and time may be thus gained for higher courses of study. Students who intend to present themselves for such examination in any required study for 1875-76 must give notice to the Dean in writing before September 1, 1875.

Information concerning the requirements for passing the examination in any study can be obtained from the instructor in that study.

ELECTIVE STUDIES.

In addition to the prescribed studies, each Sophomore is required to pursue courses, chosen by himself from the elective studies, [ftnt: The prescribed Philosophy of the Junior year may be taken as an elective by Sophomores.] amounting to eight exercises a week for the year; each Junior, courses amounting to eleven exercises a week; and each Senior, courses amounting to twelve exercises a week. Students are at liberty to attend the instruction in as many other subjects as they may have time and taste for pursuing. In choosing his electives, the student must satisfy his instructors that he is qualified by his previous training to pursue those which he selects. With this limitation, all the courses given in the College are open to him in making his choice; but he is strongly recommended to make his choice with great care, under the best advice, and in such a manner that his elective courses from first to last may form a rationally connected whole.

Undergraduates who intend to study Engineering are recommended by the Scientific Faculty to take, as extras, the courses of Drawing and Surveying in the Scientific School; and those who intend to study Medicine are advised by the Medical Faculty to pay special attention to the study of Natural History, Chemistry, Physics, and the French and German languages, while in College.

It will be seen that students who prefer a course like the usual prescribed course of American colleges can perfectly secure it, under this system, by a corresponding choice of studies; while others, who have decided tastes, or think it wiser to concentrate their study on a few subjects, obtain every facility for doing so, and still secure in the briefer prescribed course an acquaintance with the elements of the leading branches of knowledge.

 

Source: Harvard University Catalogue, 1874-75, pp. 46-47

_________________________________

IV. PHILOSOPHY

PRESCRIBED STUDIES

[…]

Prescribed Political Economy.—Prof. [ Charles Franklin] Dunbar

Sophomore Year.

Fawcett’s Political Economy for Beginners.—Constitution of the United States (Alden’s Science of Government, omitting the first four and the last three chapters).

Two hours a week. Second half-year.

 

Source: Harvard University Catalogue, 1874-75, p. 54.

_________________________________

III. PHILOSOPHY

ELECTIVES
Senior Studies

[…]

Philosophy 7. — Prof. [ Charles Franklin] Dunbar.

Political Economy. — Fawcett’s Manual of Political Economy. — Blanqui’s Histoire de l’Économie Politique en Europe. — Bagehot’s Lombard Street.

Three hours a week. 19 Seniors, 14 Juniors.

 

Philosophy 8. — Prof. [ Charles Franklin] Dunbar.

Political Economy. — J. S. Mill’s Political Economy. — Bagehot’s Lombard Street. — Subjects in Currency and Taxation.

Three hours a week. 65 Seniors, 33 Juniors.

 

Courses 7 and 8 are parallel Courses, Course 7 being preferable for students of History.

Source: Harvard University Catalogue, 1874-75, p. 56.

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III. PHILOSOPHY

PRESCRIBED STUDIES

[…]

Prescribed Political Economy.—Prof. [ Charles Franklin] Dunbar and Mr. Howland.

Elements of Political Economy.—Constitution of the United States.

Two hours a week. Second half-year. Sophomores and Juniors.*

*In 1873 the prescribed Study of Political Economy was transferred from the Junior to the Sophomore Year, and was pursued during the year 1873-74 by both classes.

Source: Harvard University Catalogue, 1874-75, p. 215.

_________________________________

PRESCRIBED POLITICAL ECONOMY.

Political Economy.

Those who are also to pass in the Constitution may omit questions marked *.

  1. Define (a)wealth; (b) value; (c)price; (d) capital; (e) money.
  2. What are the qualities which make gold and silver suitable materials for a currency? What are the objections to a double standard of value?
  3. Explain the action of demand and supply upon the prices (a) of raw materials; (b) of manufactured articles.
  4. Show how rents would be affected by suddenly doubling the productiveness of all lands under cultivation. Prove that rent does not enter into the price of agricultural produce.
  5. State and illustrate the causes which produce a difference in the rate of wages in different employments.
  6. Suppose the amount of the (gold) currency of a country to he suddenly doubled, what would be the effect upon (a) values; (b) prices; (c) exports and imports?
  7. Define direct and indirect taxation. What are the objections to an import duty on raw materials? What is the incidence of a tax levied on the rent of land and paid by the tenant?
  8. [*] Define productive and unproductive consumption. If the latter were to cease altogether, what would be the ultimate effect upon production?
  9. [*] Show how the cost of labor is affected, (a) if the efficiency of labor is increased; (b) if the margin of cultivation sinks.
  10. [*] What are the elements of which profits are composed? Why does the rate of profits vary (a) in different employments; (b) in different countries?
  11. [*] Explain the several ways in which credit promotes production. What are the disadvantages of an irredeemable paper currency?
  12. [*] Explain the use of bills of exchange. What is meant by an unfavorable balance of exchange?
  13. [*] Discuss the question, whether temporary and permanent incomes should be taxed alike.

 

Constitution of the United States.

Those who are also to pass in Political Economy may omit questions marked *.

  1. [*] When and by whom was the Constitution framed, and what were the principal steps leading to its formation and adoption?
  2. Define citizenship.
  3. What changes have the abolition of slavery and the consequent amendments of the Constitution made in the system of representation?
  4. State the method of electing the President, and the difference between the present method and that at first adopted.
  5. [*] By whom are questions settled which affect the validity of elections (a) of representatives, (b) of senators, (c) of President?
  6. [*] What provision does the Constitution make for the removal, death, resignation, or inability to serve of the President or Vice-President, or for a failure to elect either officer or both?
  7. [*] What powers over the militia are given to Congress or to the President?
  8. What are the provisions of the Constitution affecting the subject of currency
  9. What are the provisions relating to taxation, and what are direct taxes under the Constitution?
  10. [*] What are the provisions relating to impeachment?
  11. Under what provision did Congress claim and exercise the power of prohibiting slavery in the territories
  12. What is the extent of the judicial power of the United States, and where is it vested? What is the provision for amending the Constitution?

Source: Harvard University Catalogue, 1874-75, p. 218-9.

_________________________________

ELECTIVES.

[…]

  1. Political Economy.—Prof. Dunbar.

J. S. Mill’s Political Economy.—Bagehot’s Lombard Street.—Sumner’s History of American Currency.

Three hours a week. 70 Seniors, 1 Junior.

 

Source: Harvard University Catalogue, 1874-75, p. 220.

 

_________________________________

 

FEES AND BONDS.

The fees to be paid by Bachelors of Arts or Science who receive instruction as candidates for the Degree of Master of Arts, Doctor of Philosophy, or Doctor of Science, or who attend lectures or recitations without being members of either professional school, are as follows : —

For not more than three hours of instruction a week $50.00 a year.
For more than three, but not more than six hours of instruction a week $90.00 a year.

 
For more than six hours of instruction a week $120.00 a year.
For a year’s instruction in any of the laboratories or in

the Museum of Comparative Zoology

 $150.00
The fees to be paid for examination are as follows :—
For the examination for the Degree of Master of Arts $30.00
For the examination for the Degree of Doctor of Philosophy $60.00
For the examination for the Degree of Doctor of Science $60.00

 

There is no additional charge for the right to use the Library. The fees for instruction, but not those for examination, will be remitted to meritorious students who need such help.

Source: Harvard University Catalogue, 1874-75, p. 137.

_________________________________

[Advertisement of Macmillan & Company’s Books]

Logic. Professor Stanley Jevons’s Elementary Lessons in Logic, Deductive and Inductive. 18mo, cloth $1.25.

Political Economy for Beginners. By Millicent Garrett Fawcett. 18mo. $1.00.

 

Source: Harvard University Catalogue, 1874-75, p. 317.

_________________________________

[Advertisement of Lee and Shepard Books]

POLITICAL ECONOMY. Principles of Political Economy. By John Stuart Mill. New and revised edition. Lee and Shepard, Publishers. Boston. Complete in 1 vol. Crown 8vo.   $2.50

Source: Harvard University Catalogue, 1874-75, p. 336.

 

Categories
Chicago Courses Exam Questions

Chicago. Modern Tendencies in Economics. Viner. 1933

The following list of readings and examination questions come from the Milton Friedman papers. Only the examination questions are from a typed copy, the list of reading assignments has been transcribed from Friedman’s handwritten notes from when he took the course with Jacob Viner. Links have been added whenever found.  Anything within square brackets has been added by me, otherwise I have left the text for the most part as I found it.

____________________________

From Courses of Instruction 1932-33.

303. Modern Tendencies in Economics.–A critical study of controversial questions in the general body of orthodox theory, and of some modern departures from orthodox theory. The discussion covers questions as to the selection of problems in economic theory, methods, tools of thought, assumptions, laws and standards of validity appropriate to the central body of economic though under present conditions. Prerequisite: Economics 301 or its equivalent. Spring, Viner.

Source: Announcements,Arts, Literature and Science, vol. XXXII, February, 1932, no. 12 (for the sessions 1932-33), p. 354.

____________________________

Economics 303 [Spring Quarter 1933]
Modern Economic Tendencies
Jacob Viner

 Assignments

J. S. Mill—System of Logic

Bk III, chs 8, 10, 11
Bk VI, chs 1,3,7,8,9

Some Unsettled Questions, Essay V

W. H. Hamilton—The Place of Value Theory in Economics. J.P.E. March-May [sic], 1918

[Part I, March; Part II, April]

Lionel Robbins: Essay on the Nature etc of Economics ch 1 & 2

Wesley Michel [Mitchell] Role of Money in Ec[onomic] Theory Am Ec Rev Supplement March 1916

Fetter, Price Ecs vs Welfare Ecs. Am Ec Rev. Sept, ‘20

Marshall. Consumer’s Surplus & Max satisfaction

Bk II ch VI
Bk V ch XIII, 94-97
Math App. Cost & ¶ of note XIII

J.A. Hobson, Work & Wealth. Ch 1-5, 7, 8, 9, 12, 22.

[J. A. Hobson] Free Thought & the Social Sciences pp. 131-145

Viner. Utility Concept Aug 1925, J.P.E.

Robbins: Essay on the Nature etc of Economics ch 6

Pigou Ec’s of Welfare—3rd ed only

Part I ch 1-2
Part II ch 1-5, 9, 11
Appendix III pp. 787-815
[last two items “minimum”]

[4th edition, The principal changes made in this edition affect Chapter IV. and Chapter VI. §§ 12-13 in Part I.; Chapter XI. § 2 and Chapter XV. in Part II.; and Chapter IX. §§ 2-3 and Chapter XIV. § 1 in Part III.]

Veblen: “Why is Econ not an Econ Science? Place of Science pp. 56ff or Q. J. E. July 1898

Instinct of Workmanship. Chs 5 & 6

Theory of the Leisure Class. chs 1-5

Prof. Clark’s Ec’s [Economics]: Place of Science 180 ff.

Homan. Ch. VIII in Odum Am[erican] Masters of Soc[ial] Science or in Contemporary Ec[onomic] Thought pp. 105-192.

[Homan, Paul T. (1927) ‘Thorstein Veblen’, in Odum, Howard W. (ed.) American Masters of Social Science (New York: Holt), pp. 231-70.
Homan, Paul T. (1928). Contemporary Economic Thought, Harper & Bros.]

 

Institutionalism

W. C. Mitchell Prospects of Ec[onomic]’s in Tugwell. Trends pp. 1-34.

[The Trend of Economics, Rexford Guy Tugwell (ed.) (1930). The Prospects Of Economics, By W. C. Mitchell; On Measurement In Economics, By F. C. Mills; The Socializing Of Theoretical Economics, By J. M. Clark; Communities Of Economic Interest And The Price System, By M. A. Copeland; The Reality Of Noncommercial Incentives In Economic Life, By P. H. Douglas; Economic Theory And The Statesman, By R. L. Hale; The Limitations Of Scientific Methods In Economics, By F. H. Knight; Some Recent Developments Of Economic Theory, By R. T. Bye; The Organization And Control Of Economic Activity, By S. H. Slichter; Economics Science And Art, By G. Soule; Experimental Economics, By R. G. Tugwell; Regional Comparison And Economic Progress, By W. E. Weld; Functional Economics, By A. B. Wolfe.]

Hamilton The Institutional Approach. Amer. Ec. Rev. Suppl. IV, 309-324.

[Walton H. Hamilton. The Institutional Approach to Economic Theory
The American Economic Review. Vol. 9, No. 1, Supplement, Papers and Proceedings of the Thirty-First Annual Meeting of the American Economic Association (Mar., 1919), pp. 309-318.]

Hamilton. Control of Wages ch 10, 11, 12

[Walton Hamilton and Stacy May. The Control of Wages. New York: George H. Doran, 1923).]

A. A. Young pp. 249-260 in Ec. Problems, New & Old [sic]

[Allyn Abbott Young. Economic Problems: New and Old. Houghton Mifflin Comp, 1927]

[A. A. Young] English Pol. Ec. Economica, [illegible word(s)]

[Allyn A. Young. English Political Economy. Economica. No. 22 (Mar., 1928), pp. 1-15]

 

Suggestion:

Albion Small [1924] “Origins of Sociology” ch. 11 [The Attempt to Reconstruct Classical Economic Theory on the Basis of Comparative Economic History, 1850], 14 [Later Phases of the Conflict Between the Historical and the Austrian Schools].

[Albion W. Small, Origins of Sociology. Chicago: University of Chicago Press, 1924.
This book was first published serially in the American Journal of Sociology, January, 1923-November, 1924, with the title Some Contributions to the History of Sociology (Section XI and XIV). The corresponding articles are found at Vol. 29, No. 4 (Jan., 1924), pp. 443-454 and Vol. 29, No. 5 (Mar., 1924), pp. 571-598.]

Cliff. Leslie [T. E. Cliffe Leslie] “Philos. Essays” Essay 14

[cf. First edition (1879, Essay XIV “On the Philosophical Method of Political Economy”) with Second edition (1888, Essay XIV Economic Science and Statistics). Essay XVI “Political Economy and Sociology” of the second edition appears to me the reading that best fits to the sociology theme at this point in the reading list..]

Parsons “Summary of …” J. P. E. Dec. 1928, Feb. 1929

[Talcott Parsons. “Capitalism” In Recent German Literature: Sombart and Weber. Journal of Political Economy. Vol. 36, No. 6 (Dec., 1928), pp. 641-661; Vol. 37, No. 1 (Feb., 1929), pp. 31-51.]

Mitchell “On Sombart” Feb ‘29

[Wesley C. Mitchell. Sombart’s Hochkapitalismus. The Quarterly Journal of Economics Vol. 43, No. 2 (Feb., 1929), pp. 303-323]

Rogin “On Sombart” Apr. ‘33

[Leo Rogin. Werner Sombart and the “Natural Science Method” in Economics. Journal of Political Economy. Vol. 41, No. 2 (Apr., 1933), pp. 222-236]

Sombart “Die Drei Nationalökonomien”

[Werner Sombart. Die drei Nationalökonomien : Geschichte und System der Lehre von der Wirtschaft. München [u.a.] : Duncker & Humblot, 1930]

F. C. Mills in Tugwell, Trends “On Imp[?] Methd[?]”

[The Trend of Economics, Rexford Guy Tugwell (ed.) (1930). The Prospects Of Economics, By W. C. Mitchell; On Measurement In Economics, By F. C. Mills; The Socializing Of Theoretical Economics, By J. M. Clark; Communities Of Economic Interest And The Price System, By M. A. Copeland; The Reality Of Noncommercial Incentives In Economic Life, By P. H. Douglas; Economic Theory And The Statesman, By R. L. Hale; The Limitations Of Scientific Methods In Economics, By F. H. Knight; Some Recent Developments Of Economic Theory, By R. T. Bye; The Organization And Control Of Economic Activity, By S. H. Slichter; Economics Science And Art, By G. Soule; Experimental Economics, By R. G. Tugwell; Regional Comparison And Economic Progress, By W. E. Weld; Functional Economics, By A. B. Wolfe.]

Mitchell Nov[sic] 1925. Proceedings of Am. Ec. Assoc.

[Wesley C. Mitchell. Quantitative Analysis in Economic Theory. The American Economic Review. Vol. 15, No. 1 (Mar., 1925), pp. 1-12]

[Mitchell] Mar 1929 pp. 28… (A.E.R)

[Frederick C. Mills , Jacob H. Hollander , Jacob Viner , E. B. Wilson , Wesley C. Mitchell , F. W. Taussig , T. S. Adams , John D. Black and John Candler Cobb in “The Present Status and Future Prospects of Quantitative Economics”. The American Economic Review. Vol. 18, No. 1, Supplement, Papers and Proceedings of the Fortieth Annual Meeting of the American Economic Association (Mar., 1928), pp. 28-45]

Viner. Q. J. E. Feb ’29—Rev. of Millis on prices.

[Jacob Viner. Review of Behavior of Prices by Frederick Mills. The Quarterly Journal of Economics. Vol. 43, No. 2 (Feb., 1929), pp. 337-352]

Spann “ Types of Econ Theories[“] Preface, ch. 4, 12.

[Othmar Spann. Types of Economic Theory. 1929 English translation of the 19th edition of Die Haupttheorien der Vokswirtschaftslehre,  17th edition in German]

 

Schultz assignments

Chp 3, Manuel of Pareto

[Vilfredo Pareto. Manuel d’Économie Politique. Paris: V. Giard & E. Brière, 1909]

Pareto, Traité de Sociologie Général, look in index under Dependance Mutuel, & Equilibrium

[Cf. George C. Homans and Charles P. Curtis, Jr. An Introduction Pareto: His Sociology. New York: Alfred A. Knopf, 1934.]

Zawadzki, W. Les mathématiques appliqués à l’économie politique. [Paris, Rivière, 1914].

 

On In[stitutional] Ec’s [Economics]

Mitchell’s essays[sic] in Trends[sic] in Ec’s[Economics] by Tugwell & paper by Mills and Mitchell’s Pres. Address to Am. St. Ass. in 1927 volume. [?]

[The Trend of Economics, Rexford Guy Tugwell (ed.) (1930). The Prospects Of Economics, By W. C. Mitchell; On Measurement In Economics, By F. C. Mills; The Socializing Of Theoretical Economics, By J. M. Clark; Communities Of Economic Interest And The Price System, By M. A. Copeland; The Reality Of Noncommercial Incentives In Economic Life, By P. H. Douglas; Economic Theory And The Statesman, By R. L. Hale; The Limitations Of Scientific Methods In Economics, By F. H. Knight; Some Recent Developments Of Economic Theory, By R. T. Bye; The Organization And Control Of Economic Activity, By S. H. Slichter; Economics Science And Art, By G. Soule; Experimental Economics, By R. G. Tugwell; Regional Comparison And Economic Progress, By W. E. Weld; Functional Economics, By A. B. Wolfe.
Wesley C. Mitchell. Statistics and Government. Publications of the American Statistical Association. Vol. 16, No. 125 (Mar., 1919), pp. 223-235]

Source: Hoover Institution. Milton Friedman Papers, Box 120. Handwritten notes for Economics 303,Modern Economic Tendencies, Jacob Viner.

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[signature: Milton Friedman]

Economics 303
1st Examination—1 hour

  1. What was J. S. Mill’s position with respect to:

(a) the scope for induction in the social sciences;

(b) the use of the “geometric method” in political economy; in the social sciences;

(c) the “economic man.”

 

  1. Explain and appraise Marshall’s technique of “maximum satisfaction” analysis.

(a) What were Veblen’s principal contributions to economic methodology?

(b) What are the differences and what the resemblances between the content of what Hobson calls “human values” and what ordinary utility theorists call “utility” or “satisfaction” or “economic welfare”?

(c) In what manner and degree does Pigou’s technique of welfare analysis overcome the difficulties in the way of accepting price as the measure of welfare.

Source: Hoover Institution. Milton Friedman Papers, Box 115, Folder 13. “Biographical: Class Exams circa 1932-1938”.

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[signature: Milton Friedman]

Economics 303
2nd Examination—1 hour

  1. Explain, with reference to exponents of these types of economics, any five of the following:

(a) institutional economics; [✓]

(b) genetic economics; [✓]

(c) historical economics; [✓]

(d)“verstehende” economics; [✓]

(e) functional economics; [✓]

(f) experimental economics; [✓]

(g) social economics;

(h) romantic economics[✓]

2.    (a) List all of the empirical (historical) laws of economics which have been allegedly discovered by quantitative methods, and indicate for each very briefly whether you are inclined to accept it as a law, and if so on what grounds.

(b) State as briefly as possible the nature of the difficulties in the way of the discovery of genuine empirical laws of a quantitative nature in the field of economic phenomena.

  1. Write on either:

(a) Give the equations of the general equilibrium of exchange and production indicating the underlying assumptions, and the economic meaning of each equation. Compare the general equilibrium approach with that of Marshall.

or

(b) Explain the way in which pure theory has been used to determine one of the following:

(1) the concrete, statistical curve of the marginal utility of money.

(2) statistical demand curves, with special reference to the demand for related (completing or competing) goods.

(3) theoretical “cycles” of production and prices.

Point out the underlying assumptions and critically appraise the results obtained.

 

Source: Hoover Institution. Milton Friedman Papers, Box 115, Folder 13. “Biographical: Class Exams circa 1932-1938”.

Image Source: University of Chicago Photographic Archive, apf1-08488, Special Collections Research Center, University of Chicago Library. The photograph is dated 14 June 1944.

Categories
Chicago Courses Exam Questions Uncategorized

Chicago. Money and Banking. Economics 330 Exam. Autumn 1932

Here we have the exam questions and Milton Friedman’s choices together with his notes for one of the answers to Lloyd Mints’ graduate course (first in a sequence of the two quarter courses.) on Money and Banking in 1932.

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[Univ. of Chicago]

[Milton Friedman (MF signature)]

 

ECONOMICS 330
Autumn, 1932

Write on any four questions.

  1. [✓] “The banks could either keep the demand for real capital within the limits set by the supply of savings or keep the price level steady; but they cannot perform both functions at once.” (Hayek) Discuss this statement critically.
  2. “Only the purely static quantity theory needs no index number, for its comparisons assume relative prices to be unchanged inter se. The objections to Professor Fisher’s Equation of Exchange arise mainly from the faults of the price index implied in it.” (Hawtrey) Explain and evaluate this statement.
  3. [✓] The criticism is sometimes made of the quantity theory that it assumes other things to be equal, whereas in fact they are not. Discuss this criticism. What “other things” are referred to?
  4. Discuss the relation between the k of Keynes’ earlier equation and the velocity of circulation.
    b. Discuss the statement that changes in the velocity of circulation of goods cannot bring about changes in the price level because of the fact that they necessarily bring about compensating changes in the velocity of circulation of money.
  5. [✓] According to Keynes’ analysis what would it be necessary to do in order to eliminate the business cycle? State and support your opinion of Keynes’ conclusion.

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[Milton Friedman’s right margin notes for Question 4:]

n=pk
p=\frac{n}{k}
\frac{n}{k}=\frac{MV}{T}\text{ (MF then cancels }n\text{ with }M\text{)}
\frac{1}{k}=\frac{V}{T}
k=\frac{T}{V}=\frac{1}{V}

Source: Hoover Institution Archives, Milton Friedman Papers, Box 115, Folder  13 (Biographical. Class exams, ca 1932-38).

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Cf. Keynes: Tract on Monetary Reform (1923), p. 76-77

“We can measure this definite amount of purchasing power in terms of a unit made up of a collection of specified quantities of their standard articles of consumption or other objects of expenditure….Let us call such a unit a ‘consumption unit’ and assume that the public require to hold an amount of money having a purchasing power over k consumption units. Let there be n currency notes or other forms of cash in circulation with the public, and let p be the prices of each consumption unit (i.e., p is the index number of the cost of living), then it follows from the above that n = pk. This is the famous Quantity Theory of Money.”