Other undergraduate Harvard divisional/departmental general exams that have been transcribed and posted earlier:
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HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS
GENERAL EXAMINATION — May 2, 1956
(Three hours)
Please be sure to use a separate bluebook for each Section, noting on the cover of each book the numbers of the questions discussed therein, and HONORS or NON-HONORS.
PART I
(One hour)
Economic Analysis
All candidates answer ONE question.
- It is often said that investment is one of the principal determinants of national income. On the other hand it is also claimed that national income is one of the principal determinants of investment. In what sense is each of these statements true? What are the implications of these propositions for the theory of business cycles?
- “Almost no one would select the industries which are distinguished by a close approach to the competitive model as a showpiece of American industrial achievement. The showpieces are, with rare exceptions, the industries which are dominated by a handful of large firms. The foreign visitor, brought to the United States by the Economic Cooperation Administration, visits the same firms as do attorneys of the Department of Justice in their search for monopoly.” Discuss.
- Wages and profits perform important functions in the economic system. To what extent are these functions the same and to what extent do they differ?
- Ricardo considered savings as the basis of economic growth. Some modern common economists on the other hand have argued that a high propensity to save reduces the rate of economic growth. Explain the reasons for each of these views.
- Agriculture is an excellent example of the failure of the competitive system to allocate resources efficiently. Discuss.
PART II
(Two hours)
Part II consists of five sections: A. Industrial Organization; B. Labor Economics; C. Economic History; D. Money, Economic Fluctuations, and International Trade; and E. Statistics. Each student must answer FOUR questions from Part II, distributed among the sections as follows:
Either
(1) TWO questions each from TWO different Sections chosen from A, B, C, D.
Or
(2) ONE question from Section E; and three other questions, TWO chosen from any ONE of A, B, C, D, and ONE from ANOTHER of these Sections.
A. Industrial Organization
- “The diversity of behavior revealed by a study of particular oligopolies in the United States helps explain why economists have been unable to produce a unique theory of oligopoly.” Discuss.
- Evaluate the evidence for and against the thesis that monopoly has increased during the last half-century in American manufacturing industries.
- With respect to either electric power or railroads, what do you think have been the chief achievements and shortcomings of the regulatory process in the United States?
- Discuss the problem of resale price maintenance laws, commenting on
- The historical circumstances from which resale price maintenance agreements evolved;
- The characteristics of goods most commonly sold under resale price maintenance agreements and why the producers of these goods prefer to operate under such agreements;
- The economic effects of resale price maintenance.
B. Labor Economics
- The following are recently released figures by the Bureau of Labor Statistics showing production, man hours, and output per man hour in the bituminous coal industry since 1935. Selected years are shown as follows; 1947-49 is the base in each case.
| Year | Production | Man hours | Output per man hour |
| 1935 | 67.0 | 89.0 | 75.3 |
| 1938 | 62.7 | 73.8 | 85.0 |
| 1941 | 92.5 | 100.5 | 92.0 |
| 1945 | 103.9 | 111.5 | 93.2 |
| 1948 | 107.8 | 109.0 | 98.9 |
| 1950 | 92.9 | 82.1 | 113.2 |
| 1954 | 70.4 | 47.3 | 148.8 |
(a) What factors would you advance to explain the movement in output per man hour? (b) Is the 100 percent rise in output per man hour in this twenty year period a consequence of, or a reason for, substantial wage rate increases?
- How do you praise be consequences of the merger between the AFL and CIO? Indicate the consequences for organizing campaigns and union growth, internal union government, legislative and political action, collective bargaining, and the movement of wages. Consider the consequences both within the labor movement and for the economy generally.
- “The growing importance collective-bargaining cannot be reconciled with the view that unions may be considered as private organizations or ‘clubs’.” Discuss. What types of public policy would you advocate with respect to governmental intervention in the internal affairs of unions?
- Explain the meaning of “marginal productivity” to a friend who is never studied economics. Explain further whatever degree of relation you believe exists between marginal productivity and wages.
C. Economic History
- It has been said that “mercantilism” has always been the dominant economic philosophy in American politics. Discuss.
- How does the development of the corporation as an institutional form for organizing business activity different in United States and Great Britain? What accounts for and what have been the consequences of these developments?
- Contrast ante- and post-bellum Southern Agriculture.
- What light does [sic] the depression experiences of 1873, 1920, 1929, cast on business cycle theories and policies?
D. Money, Economic Fluctuations, and International Trade
- What actions could the Federal Reserve authorities take to check an inflationary movement? What objections might be raised against the use of any combination of these actions?
- Suppose the trade unions force up money wages. Discuss the effect of the change on employment and prices in terms of (a) the Quantity Theory of Prices (b) the Keynesian theory of the price level.
- Supposed that aggregate income were to remain constant for the next six months while unemployment slowly rose. What budgetary and monetary policies would you recommend?
- In a recent statement to the Associated Press, Mr. T. Coleman Andrews, Commissioner of Internal Revenue for the first three years of the present administration until his resignation last Spring, declared his complete opposition to the taxation of personal income. He advocated completely doing away with the individual income tax and substituting “less burdensome” taxes.
- What reforms, if any, would you advocate in the taxation of individual income? Explain.
- Are there any “less burdensome” taxes than the individual income tax? Explain.
Note: throughout your discussion keep in mind the fiscal policy aspects of taxation as well as considerations of the effects on incentives, equity, etc.
- With few exceptions output per worker is much higher in American industries (including agriculture) than in other countries. How is it possible under these circumstances to maintain equilibrium between exports and imports?
E. Statistics
- Summarize and discuss critically two quantitative studies dealing with one or more phases of household behavior.
- Discuss the relative advantages and disadvantages aggregative time series data, cross sectional data, and re-interview data on identical households for purposes of estimation and testing of hypotheses.
- Discuss various ways in which statistics may be of use in economic research. In formulating your answer give consideration to some or all of the following: formation of hypotheses, testing of hypotheses, estimation of population parameters, and design of experiments.
Source: John F. Kennedy Presidential Library. John Kenneth Galbraith Personal Papers, Harvard University File, 1949-1965, Box 528, Folder “Tutorial 9/15/51-9/57”.
Image Source: Duster House Tower, Harvard College. Library of Congress, Prints and Photographs Division.