Harvard. Graduate Economic Theory Exam. November 1962

Edward Chamberlin was a member of the graduate examination committee of the Harvard economics department in the early 1960s and in his files I have found copies of the theory exams from 1961, 1962, and 1963 along with a few memos that  circulated among members of the committee that together provide a description of the procedures used for grading.

Of related interest is the following report that was transcribed and posted earlier:

Report on the General Examination for an Economics PhD, 1970

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Other Written Exams
in Economic Theory

April 11, 1961
April 8, 1963

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HARVARD UNIVERSITY
Department of Economics

Written Exam in Economic Theory
November 13, 1962

ANSWER ANY 7 (AND ONLY 7)
AMONG THE FOLLOWING QUESTIONS.

Questions are all of equal weight.

Use a separate book for each question.

(Please write legibly. Please write, on your first exam book, a phone number or address where you can be reached quickly in the event your exam book, because of handwriting, has to be transcribed and the typist cannot decipher some of your writing.)

1. Compare the views and arguments of Ricardo, the Austrians, and Marshall, on the question of the roles of utility and demand, and of cost of production and supply, in determining the prices of the goods produced in a competitive economy.
2. Construct a simple (static) general equilibrium model of a closed national economy, and show how it can be used to explain employment, prices, wage rates and the distribution of national income between capital and labor.
3. Indifference surfaces of an individual’s ordinal utility function are defined by

U = x^1/3 y^1/3 z^1/3

where U is utility and x, y, and z express quantities of three different products consumed. The individual himself produces 1 unit of x, 2 units of y, and 3 units of z.

3. 1. Derive the equilibrium levels of consumption of the three products as a function of relative prices;
   2. Derive the demand (supply) curves for the three products, and show as an application the quantities of x, y, and z demanded or supplied in the case where all money prices are equal;
   3. Derive the relative prices that would have to prevail in a competitive market to keep the individual at autarky.
4. Compare and evaluate critically the solutions of duopoly proposed by at least 3 of the following: Cournot, Bertrand, Stackelberg, and Fellner.
5. Keynes maintained that an economy could be in equilibrium with a substantial amount of involuntary unemployment, but many other economists feel that an equilibrium in which an important market is not cleared is a contradiction in terms. Explain the concept of macro-economic equilibrium and in the light of this explanation sketch Keynes’ justification of his position and the Pigou-Patinkin refutation of it.
6. Present the argument according to which indirect taxes reduce the efficiency of the economic system, while a direct income tax does not, and show how the validity of this argument is affected by the existence of consumers’ choice between work and leisure.
7. Write on “increasing returns” with respect to (a) the firm; (b) the industry; and (c) the whole economy. In each case you should discuss at least: explanations of the phenomenon, how it affects the efficiency of the competitive pricing mechanism, and the question of stability or instability of equilibrium.
8. Point out and discuss what seem to you the most important similarities and difference between (a) Marx’s, and Schumpeter’s, theories of economic development under capitalism.
9. Discuss the problem of excess capacity in firms or in groups of firms. What different meanings may the phrase have? To what extent and way would you expect to find excess capacity in (a) static equilibrium; (b) a fluctuating economy; (c) a growing economy.
10. “Comparative advantage” is typically elaborated in the context of international or interregional trade. Generalize the concept as an economic principle and discuss the reasons you think account for its conspicuous association with international economics.
11. Discuss the theoretical significance of the distinction between net and gross investment in models of economic growth incorporating technological change.

You may keep this question sheet when you hand in your exam books.

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HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

Robert R. Bowie, Director
Alex Inkeles
Henry A. Kissinger
Edward S. Mason
Thomas C. Schelling

6 Divinity Avenue
Cambridge 38
Massachusetts

November 19, 1962

From: T. C. Schelling

To: Messrs. E. H. Chamberlin, W. W. Leontief, and J. Vanek

Subject: Written Examination in Economic Theory

Seven students took the exam, and we have a total of forty-two questions, each in a separate book. I had managed to allot the questions so that each of us grades either ten or eleven books. I am asking Chamberlin to grade questions 1 and 9, Leontief 2, 7, and 11, Vanek questions 3, 4, 8, and 10, Schelling questions 5 and 6. Wassily and I get eleven a-piece, Ed and Jaroslav get ten a-piece.

If you are interested in what the students chose, it is follows:

Question     1 — 6	7 — 5
2 — 4	8 — 5
3 — 1	9 — 4
4 — 4	10 — 1
5 — 5	11 — 2
6 — 6

Enclosed, for each of you, are the books you should grade.

Each book will have a second reader. I will redistribute them as they come back. Some may need a third reader.

As we agreed, let’s grade them “excellent,” “good,” “fair,” and “fail,” with plus and minus as appropriate, and for averaging we will treat the intervals between grades as numerically equivalent. For borderlines between pass and fail, if any, we can reconsider the scaling system.

The immediate urgency is only in letting students know whether they are still preparing for orals. When I asked, none were scheduled for before Christmas. But I would like to finish the grading by the middle of next week if we can. If you can read your books before Thanksgiving, so I can redistribute them next Monday, it would help.

[After a] quick check I did not notice any with an impossible handwriting, [and] if you wish you may ask Joyce to get your books transcribed. That will slow us down, but I believe it is worthwhile. If you lose any books, we all hang together.

P.S. I suggest you not write your grade on the book. Each of us is then free to do a second reading unconstrained. Instead, turn in a sheet for each question with a grade corresponding to each student number; the number in red pencil is the code for the individual student. Please return your books and grade sheets to Joyce.

TCS: ac

Enc.

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HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

Robert R. Bowie, Director
Alex Inkeles
Henry A. Kissinger
Edward S. Mason
Thomas C. Schelling

6 Divinity Avenue
Cambridge 38
Massachusetts

December 7, 1962

From: T. C. Schelling

To: Messrs. Chamberlin, Leontief, and Vanek

Subject: Theory Exam Grades

I have communicated to the Departmental office that all six who took the exam have passed. Wassily and I agreed on the phone that we should add to the dosier of the two poorest ones our scepticism that they are qualified for a Ph.D, and urging the oral examining committee to take very seriously the unsatisfactory quality of their theory exam. I shall set up a meeting this week at which we can settle on the grades for these students and work out language to meet Wassily’s point.

In preparing some statistics for you I discovered some minor errors in my tabulation; these raised the lowest grades by about one point in total, or 1/14th of a point for the grade average.

Attached is a tabulation that gives the two grades by student, by question, and by grader — the capital letters are the initials of the four graders.

I will call you to set up a meeting. At that time we can also discuss what we want to report to the Department, if anything.

The names of the students, with their scores, are as follows:

Book	Student	Score
6	[name deleted]	30.0
3	[name deleted]	23.3
5	[name deleted]	22.0
1	[name deleted]	18.0
2	[name deleted]	16.3
4	[name deleted]	14.3

TCS:ac

Theory Exam Grades*

Question		Student
		1	2	3	4	5	6
1	C	2-	1	2-	1	2+	2
	V	2+	2	2+	2-	3-	2+
2	S			2-	2-		2+
	L			0	0		0+
3	V					2+
	L					0+
4	C		2	1		2	3
	V		2	2+		3-	3-
5	S	2-	1	3		2	1
	V	2-	1+	3-		2	3-
6	S	0+	0	2-	1	1	2-
	L	1-	0	2	0	1-	3
7	C	2	1	2-	1-	0+
	L	2	1	1	0	1
8	S	2-	1	1-	2-		3
	V	2-	2-	2-	2		3-
9	C	1	1+		1+		1+
	L	1	1		1		2
10	S	0-
	V	1-
11	V				1+	2-
	L				1	1
Total points**		18.0	16.3	23.3	14.3	22.0	30.0
Average		1.28	1.17	1.66	1.02	1.57	2.15
No. of excellents**		0	0	2	0	2	6
No. of fails**		2	2	1	3	2	1

*Scoring: Excellent = 3, Good = 2, Fair = 1, Fail = 0, with 1/3 point for (+) and (-).

**For fourteen grades, two on each question.

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Edward H. Chamberlin Papers, Box 18, Folder “Written Theory Committee, 1963-64”.