Harvard economics alumnus Wolfgang Stolper (Ph.D. 1938) was able to leverage his friendships and connections from graduate school to obtain a flow of external examiners for Swarthmore College’s honors examinations in economics. For today’s post I have transcribed the examination questions in economic theory provided by Richard Musgrave (Harvard Ph.D., 1937).
The 1943 honors examination questions of Paul Samuelson have been posted earlier.
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SWARTHMORE COLLEGE
Honors Examination
Richard A. Musgrave
Federal Reserve Board
Washington, D. C.
June 11, 1946
2:00-5:00 p.m.
ECONOMIC THEORY
Answer 4 questions, one from each part. All questions have equal weight.
Part I
There are some basic tools and concepts of economic analysis which can be applied to the solution of a variety of economic problems. Demonstrate this for any one of the following three tools, choosing such illustrations as you consider most significant:
(1) Indifference curves
(2) Tendency toward equilibrium
(3) Multiplier principle
Indicate both merits and shortcomings of your tool.
Part II
(1) Explain the shape of short and long run cost curves for the individual firm and show their relationship to the industry’s cost schedule.
(2) “From the social point of view perfect competition is always superior to monopolistic competition, monopoly or oligopoly.” Discuss.
(3) Discuss price determination under duopoly.
(4) Show briefly the effects on a firm’s price and output of any three of these changes:
(a) An increase in wage rates
(b) A progressive tax on profits
(c) A fall in demand
(d) A flat tax on unit of output. Show how the results will depend upon the prevailing state of competition.
Part III
(1) Compare the economic determination of (a) distribution of income and (b) factor prices in a free market economy and in a centrally planned economy.
(2) “The theory of distribution based on the concept of marginal productivity provides the economist with an adequate answer to the solution of wage disputes”. Do you agree?
(3) Discuss the difference, if any, between interest and profits and state the major factors which determine either return.
(4) Discuss the economic pros and cons of a more equal distribution of income, allowing for all major aspects of the question.
Part IV
(1) Suppose that a rapid development of atomic energy during the next 10 years will lead to a drastic reduction in the cost of power and a replacement of coal and electricity. What would be some of the economic consequences?
(2) Discuss the major factors determining the level of income and employment. You may illustrate with reference to a future year, say 1950.
(3) “As long as flexible costs and prices are assured, it is indeed impossible that overproduction or unemployment should prevail. The doctrine of under-employment equilibrium advanced by Keynes and others is based on the assumption of price rigidity.” Do you agree?
(4) “The capitalist society is inherently unstable. It may be likened to a bicycle rider who can maintain his balance only by moving ahead at a rapid rate.” Explain and discuss.
Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Wolfgang Stolper’s Papers. Box 22, Folder 1.
Image Source:Richard A. Musgrave portrait from the University of Michigan Faculty History Project.