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Exam Questions Johns Hopkins Principles Undergraduate

Johns Hopkins. Exams for the five sections of principles of economics, 1937-1938

 

This post is the first of transcribed mid-year and end-year course examinations in political economy at Johns Hopkins University for the academic year 1937-1938. Principles of economics was taught in five sections: three for the College of Arts and Sciences, one for the School of Business Economics and one for the School of Engineering.

Related earlier material from Johns Hopkins:

Exams 1921-22;  Exams 1923-24; Exams 1932-33. 

A report of activities of the department of political economy for 1935-1936 has also been transcribed and posted earlier.

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Course Description

1 C. Elements of Economics. Three hours weekly through the year. Section 1: Dr. Bullock, Th., F., S., 8.30. Maryland Hall 110. Section 2: Associate Professor Mitchell, M., Tu., W., 8.30. Maryland Hall 110. Section 3: Associate Professor Weyforth, M. Tu., W., 11.30. Gilman Hall 314. Section 4: Dr. Cooper, M., Tu., W., 10.30. Gilman Hall 311. Section 5: Mr. Deupree, M., Tu., W., 8.30. Gilman Hall 314.

Note: Students in the School of Engineering will be assigned to Section 1; students in the School of Business Economics to Section 3; and students in the College of Arts and Sciences to Sections 2, 4, and 5.

This course teaches the elements of the science, aiming to show the principles upon which economic society is organized and operated. Particular attention is given to the theory of value and the theory of distribution together with their application to leading economic problems. Such subjects as Money and Banking, Rent, Wages, Interest, Profits, Industrial Combinations, International Trade, are treated in the course. It is part of the purpose of the course to indicate the application of scientific principles to current economic problems.

Required of all students before graduation.

Source: The Johns Hopkins University Circular (1937). Vol. LVI, No. 486 (April, p. 61).

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Elements of Economics
Mid-year and End-year Examinations
1937-1938

Elements of Economics. Section 1
Dr. Roy J. Bullock

THE JOHNS HOPKINS UNIVERSITY
MID-YEAR EXAMINATION
POLITICAL ECONOMY 1 C

Dr. Bullock

Wednesday
February 2, 1938, 9 a.m.

I.

Define or identify:

1. Property
2. Utility
3. Laissez-faire
4. Intensive margin of cultivation
5. Cumulative preferred stock
6. Time preference
7. Craft gild
8. Marginal revenue
9. Vertical combination
10. Demand

II.

What would be the difference between monopoly and competitive price under the following conditions:

    1. Elastic demand and increasing costs
    2. Elastic demand and rapidly decreasing costs
    3. Inelastic demand and increasing costs
    4. Inelastic demand and decreasing costs?

Illustrate each with a diagram.

III.

President Roosevelt has proposed a revision of the Federal Anti-Trust Laws. What reasons are there for being dissatisfied with our existing anti-trust laws? Are there any reasons for changing the objectives that have guided our anti-trust policy in the past? In what respects is the trust problem a price problem? Discuss.

IV.

Assume the following data with regard to a grain farm for the years 1930 and 1936:

1930 1936
Number of bushels produced 5,000 7,000
Total expenses of production $4,500 $8,000
Price of grain per bushel $.90 $1.30
Rate of return expected on farm investments 5% 4%
    1. What was the economic rent of this farm in 1930? in 1936? As a tenant what rent could you have afforded to pay in each year?
    2. Does the rent paid by the former have any effect on the price of grain at the primary market? Explain.
    3. As a buyer of land how much would you have been willing to pay for this farm in 1930? in 1936? Why?
    4. If grain alcohol became a commercial success as a substitute for gasoline, what would be the probable effect on the economic rent of this farm?

V.

Compare the advantages and disadvantages of the individual proprietorship, the corporation and the partnership from the point of view of the organizer of a business. Why has the corporation gained in relative importance during recent years?

THE JOHNS HOPKINS UNIVERSITY
FINAL EXAMINATION
POLITICAL ECONOMY 1 C

Dr. Bullock

Friday, June 3, 1938 – 9 a.m.

I

Explain briefly the meaning or significance of:

1. Legal tender
2. Favorable balance of trade
3. Interstate Commerce Act of 1887
4. American Federation of Labor
5. Fiat money
6. Stoppage at the source
7. Elastic currency
8. Committee for Industrial Organization
9. Taxation according to benefit
10. Workmen’s compensation law.

II

(a) Explain clearly how commercial banks are able to make loans greatly in excess of their cash resources.

(b) Explain the difference between the equation of exchange and the quantity theory of money.

III

A popular slogan of recent years has been, “More business in government, less government in business.” Developments have been in the opposite direction to that advocated. Have these developments been the result of party politics or are they in accord with underlying economic tendencies? Evaluate the slogan in the light of current conditions.

IV

Appraise national legislation to stablish a minimum weekly wage and a maximum number of hours work per week with regard to its probable effect on laborers income and on the business cycle.

V

(a) “The restoration of the pound sterling to its pre-war value was equivalent to the imposition of a heavy tax upon the British exporting industries.” Explain. Did the increase in the value of the pound make it easier or more difficult for other countries on the gold standard to sell in the British market? Explain.

(b) Explain and illustrate the difference between a tariff schedule designed as a revenue measure and a schedule aimed primarily at protection.

*  *  *  *  *  *  *  *  *  *  *  *

Elements of Economics. Section 2
Associate Professor Broadus Mitchell

THE JOHNS HOPKINS UNIVERSITY
MID-YEAR EXAMINATION
Political Economy 1 C

[Monday, Jan. 31, 1938. 9 a.m. Dr. Mitchell]

  1. What is the general theory of the competitive economic system?
  2. (a) Show how prices are determined under conditions of competition.
    (b) What are some of the forces which, in fact, interfere with this perfect operation of competition?
  3. On what economic theory do inflationists rely? Explain this theory briefly.
  4. State and explain the marginal utility theory of value.
  5. Identify briefly: the Physiocrats, Colbert, Kirkcaldy, James Watt, P. S. DuPont, Salmon P. Chase, R. B. Taney, Friedrich Engels, holding company, consumer‘s surplus, elastic demand.
  6. (a) Discuss the chief means used in this country to cope with the problem of unemployment.
    (b) What is meant by “technological unemployment”?
  7. Explain the changes made in the Federal Reserve System as a result of the depression of 1929.

 

THE JOHNS HOPKINS UNIVERSITY
FINAL EXAMINATION
IN
POLITICAL ECONOMY 1 C

Dr. Mitchell

May 30, 1938
9 a.m.

  1. (a) Give the purposes, structure, and method of operation of the Federal Reserve System.
    (b) Why, in your opinion, did it fail to prevent the depression of 1929 and the subsequent closing of the banks of the country?
  2. (a) Explain the differential or Ricardian theory of rent.
    (b) What were the influences responsible for Henry George’s book, Progress and Poverty?
    (c) What is the Socialist’s criticism of the single tax proposal?
  3. State and discuss the Wage Fund Theory and the Exploitation theory of wages.
  4. (a) How do pure profits arise?
    (b) What developments in American economic life appear to make our old reliance upon the profit motive inappropriate now?
  5. In what sense is it true that the cost known as interest would be present even in a collectivist economy?
  6. What forces are responsible for the present increased demand for industrial unionism as against craft unionism in the United States?
  7. Contrast the teachings of Robert Owen with those of Karl Marx.

*  *  *  *  *  *  *  *  *  *  *  *

Elements of Economics. Section 3
Assoc. Professor William O. Weyforth

THE JOHNS HOPKINS UNIVERSITY
MID-YEAR EXAMINATION
POLITICAL ECONOMY 1 C

Dr. Weyforth

February 3, 1938
9 a.m.

  1. What is meant by the doctrine of “laissez faire”? That were the conditions under which the doctrine was developed? Explain the arguments in favor of the doctrine, and the factors responsible for a departure from the doctrine in recent years.
  2. What are the essential features of the corporation as a form of business organization? How do you account for the rise of the corporate form of business organization in recent years? Distinguish the following: common stock, preferred stock, bonds.
  3. What are the “factors of production” and the “agents of production”? What is meant by the “best combination of the agents of production” as applied to any business enterprise. Distinguish between the average total unit cost of production and the marginal cost of production. Illustrate by diagram.
  4. Explain what is meant by an individual demand schedule for any commodity. Show the relationship between such a demand schedule and the theory of marginal utility. Upon what principles does a consumer tend to divide his expenditures among different commodities? How is the total demand schedule in any market for a certain commodity related to the individual demand schedules?
  5. Show how the market price is determined by supply and demand under conditions of competition. Show how an increase in supply, demand remaining constant, will lead to a decline in price. Would the decline in price be greater where the demand is elastic or inelastic? Explain the problem by the use of diagrams.
  6. In what way is the monopolist able to control price? What is the theory of monopoly price? Explain the statement that the monopolist will tend to fix the price at the point where the marginal revenue curve intersects the marginal cost curve.
  7. What is meant by monopolistic competition? State some of the circumstances under which it tends to appear. Explain the difference in the shape of the demand curve for the product of an individual producer under conditions of pure competition and those of monopolistic competition.
  8. Explain the distinction between industries of constant cost, increasing cost, and decreasing cost. What are the factors primarily responsible for these differences, that is, under what circumstances are we likely to have each type of industry? How can we have an industry of increasing cost and at the same time constant or falling prices for the product of that industry over a period of years.
THE JOHNS HOPKINS UNIVERSITY
FINAL EXAMINATION
POLITICAL ECONOMY 1 C

Dr. Weyforth

June 2, 1938
9 a.m.

  1. In the regulation of public utilities, what are the important economic problems involved in the determination of a fair price to be charged for the services rendered?
  2. Show how bank deposits subject to check serve as a medium of exchange. Explain how the volume of such deposits may be affected by the loan and investment policies of banks.
  3. What are business cycles? Explain the theory that fluctuations in general business activity are due primarily to fluctuations in the volume of investment. What are the possibilities of public spending as a means of remedying business depression?
  4. Explain the theory that under conditions of competition the rate of wages in any occupation tends to correspond to the marginal productivity of labor in that occupation. According to this theory how do you explain the relatively higher wages paid to skilled workers as compared with unskilled workers?
  5. Explain how, other things being equal, the growth of population will affect the rent of land. How is this explanation related to Henry George’s proposal. for a single tax on land?
  6. Show how interest rates are determined by the supply of and the demand for loanable funds. What are the sources of the supply of and demand for loanable funds? How may banking policy affect interest rates? What are the limits of banking policy in this respect?
  7. What are the factors that give rise to profits? What functions do profits perform in an economic system of free enterprise?
  8. What are the characteristic features of capitalism? What do you mean by socialism? by communism? What is “utopian” socialism? “scientific socialism”?
  9. Explain the law of comparative cost as applied to international trade.

    *  *  *  *  *  *  *  *  *  *  *  *

Elements of Economics. Section 4
Dr. Howard E. Cooper

THE JOHNS HOPKINS UMIVERSITY
MID-YEAR EXAMINATION
POLITICAL ECONOMY 1 C

[Dr. Cooper]

January 31, 1938
9 a.m.

Please write your answers to these questions legibly and in ink.

  1. “The Production of wealth may take the form of the creation of form utility, of place utility, or of time utility.”
    Explain and give examples of each.
  2. What would be the effect on our industrial system of too much saving, of too little saving?
  3. “The division of labor promotes production by economizing labor, increasing its efficiency, and making more effective use of capital.” This is all helpful from the point of view of capital. How about the laborer?
  4. What is the concept of marginal utility?
  5. What are some examples of elastic demand?
    What are some examples of elastic supply?
  6. Distinguish between increasing costs and decreasing costs.
  7. What is the meaning of imperfect competition?
  8. What are some of the limitations on monopoly price?
  9. Suppose the quantity of money held by everyone were to be doubled. Would we be twice as wealthy? Explain.
  10. Discuss briefly some of the factors which influence the rate of interest.
THE JOHNS HOPKINS UNIVERSITY
FINAL EXAMINATION
IN
POLITICAL ECONOMY 1 C

Dr. Cooper

Monday [May] 30, 1938
9 A.M.

Please use ink and write clearly.

  1. In what ways does the Federal Reserve System seek to control credit?
  2. (a) What is the significance of the double budget made use of by President Roosevelt?
    (b) Trace briefly the National Debt of the United States?
  3. (a) What is meant by combining business risks to prevent their harmful effects? Illustrate.
    (b) What is meant by passing risks to the shoulders of others more able or willing to bear them? Illustrate.
  4. Define the following:
    (a) a pool
    (b) a trust
    (c) a holding company
    (d) a consolidation
    (e) a merger.
  5. The newspapers frequently carry statements to the effect that local patriotism requires that you patronize local merchants and industries in order to keep money at home. Criticize.
  6. What factors lead to fluctuations in foreign exchange?
  7. Would you advocate an early return to the gold standard? Give reasons for and against.
  8. Discuss briefly the factors affecting the supply and demand for labor.
  9. Distinguish between the craft or trade union, and the industrial union. Which do you think will be the union of the future? Why?
  10. Marx held that the tendency toward concentration, and the increasing numbers and misery of the laboring class would lead us into Socialism. Taking into consideration the long time period, is it possible that he was right?

*  *  *  *  *  *  *  *  *  *  *  *

Elements of Economics. Section 5
Dr. Robert G. Deupree

THE JOHNS HOPKINS UNIVERSITY
MID-YEAR EXAMINATION
POLITICAL ECONOMY 1 C

Dr. Deupree

February 1, 1938
1 p.m.

  1. Define: wealth, utility, income, capital, functional distribution.
  2. Contrast: the manorial system, guild system, and domestic system.
  3. Distinguish between the following forms of the business unit: Individual proprietorship, partnership, limited partnership, and corporation.
  4. Discuss the economic effects of division of labor.
  5. Explain the marginal utility concept.
    How does it relate to price?
    Explain marginal cost of production.
    How does it relate to price?
  6. Distinguish between production under conditions of increasing, decreasing, and constant costs, giving examples of each.
  7. A monopolist finds the following cost and demand schedules prevailing in the market for his commodity:
Quantity Cost per unit Selling price per unit
1,000,000 1.00 1.00
750,000 1.07 1.10
500,000 1.36 1.40
250,000 1.49 1.50

What would be the monopoly price in this market? Why? Are there any limitations upon the monopolists’ power to fix price? Explain.

  1. Show how economic rent arises on urban lands. Does the law of diminishing returns apply to urban lands? If so, in what manner? Explain what is meant by the extensive and intensive margins of cultivation in agriculture and their relation to economic rent.
  2. What is the time preference theory of interest?
    How would the rate of time preference be affected by:
  1. a steady growth of the national income?
  2. extravagance in consumption?
  3. old age pensions paid by the government?
THE JOHNS HOPKINS UNIVERSITY
FINAL EXAMINATION
POLITICAL ECONOMY 1 C

Dr. Deupree

June 1, 1938
9 a.m.

  1. Identify or define:
    1. Karl Marx
    2. Thomas Malthus
    3. Gresham’s law
    4. Knights of Labor
    5. Rochdale system
    6. Law of large numbers
    7. Hedging
    8. Processing taxes
    9. Gold export point
    10. Mint par of exchange.
  2. a. Discuss money.
    b. Define a commercial bank and discuss its functions.
    c. Define a central bank and discuss its functions.
  3. Summarize the major provisions of and evaluate any two of the following:
    a. Banking Act of 1935
    b. Social Security Act
    c. Trade Agreements Act
    d. National Labor Relations Act
    e. National Industrial Recovery Act
    f. Clayton Anti-trust Act
  4. a. Sketch the basis of the conflict between the American Federation of Labor and the Committee for Industrial Organization. Discuss the relative merits of the arguments.
    b. How would you account for the wages paid a particular group of workers — for example, carpenters in Baltimore?
  5. a. What are the basic Socialist proposals?
    b. Distinguish: Socialism, Communism, Fascism.
  6. How would you meet the unemployment problem in the United States? Give reasons for each step you propose.

Source: Johns Hopkins University, Eisenhower Library. Ferdinand Hamburger, Jr. Archives. Department of Political Economy. Curricular Materials. Series 6. Box 2. Folder “Department of Political Economy — Exams, 1936-1940”.