Cambridge. Intercollegiate and preliminary examinations in economics, 1931-33

 

The following examinations were included in a publication of the Cambridge University Economics Tripos for 1931-33. Appended to the publication of the 1921-1926 Cambridge Economics Tripos Papers are the “Papers set in the qualifying examinations 1925 & 1926”. So the following three exams most likely served as an early hurdle to clear before being admitted to the Economics Tripos.

 

Intercollegiate Examination of Economics (June 1931)

Principles of Economics
Subjects for an Essay
Trade and Finance
Industry and Labour

Intercollegiate Examination of Economics (June 1932)

Economic Theory
Currency and Banking
Industry and Trade
Labour

Preliminary Examination in Economics (June 1933)

Principles of Economics
Industry, Labour and Money. Paper I
Industry, Labour and Money. Paper II
Modern Economic History

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INTERCOLLEGIATE EXAMINATION IN ECONOMICS.

Monday, June 8, 1931. 9—12.
PRINCIPLES OF ECONOMICS.

1. What is meant by a perfect market? To what extent must fundamental economic theory be modified in view of the fact that in practice markets are not perfect?
2. “The representative firm was devised to meet the difficulties occurring in the analysis of supply when there is a disparity of efficiency as between different producers.” Comment.
3. Are there any reasons, for purposes of economic analysis, for drawing a distinction between the royalties received by owners of mining properties and the interest received by debenture holders in mining companies?
4. “Increasing returns maybe due to external economies or to internal economies.” What are external and internal economies, and under what conditions, and in what sense, can increasing returns be said to be due to each?
5. “If we were content to dispense with further industrial progress we should no longer have to pay tribute in the form of profits to business men.” Discuss.
6. What is likely to be the effect on the price and output of agricultural produce of levying a land tax from which agricultural land is exempt?
7. In what circumstances is a rise in the general level of wages likely to be (a) compatible, (b) incompatible with full employment for labour?
8. Consider carefully under what conditions the control of an industry by a monopolist is likely to be in the social interest.
9. “The Theory of Distribution is but a particular application of the Theory of Value.” Elucidate this statement.
10. How far do economic and social considerations justify the right of private bequest?

 

Monday, June 8, 1931.  1. 30—4. 30.
SUBJECTS FOR AN ESSAY.

Write an essay on one of the following subjects:

1. “For our great-grandchildren the problem will be how to live rather than how to keep alive.”
2. The Electrification of the Railways.
3. “Democracy has had its chance and has failed: let us pass on.”
4. The Control of the World’s Wheat.
5. “The Five Years Plan.”
6. The Economics of Advertising.
7. “La République n’a pas besoin de Savants.”

 

Tuesday, June 9, 1931. 9—12.
TRADE AND FINANCE.

1. “Ten years of industrial depression measures the cost to this country of the Return to Gold.” Discuss.
2. Would you agree that the world price level of the next twenty years is at the discretion of the Central Banks in the chief industrial countries? Why, or why not?
3. What bearing has the proportion of their resources that people choose to hold in the form of money upon the value of money?
4. In October 1929 the market rate of discount was about 6¼ % while the yield of fixed-interest stocks was about 4¾ % in March 1931 the former was about 2½ % and the latter about 4½ %. How would you account for these facts?
5. “To-day, as in the middle of the last century, Free Trade is the best policy for this country: the reasons may be different, the conclusion is the same.” Investigate this argument.
6. What are the relative advantages or disadvantages for this country of a fixed fiduciary issue as compared with a proportional reserve system of note issue?
7. State clearly the differences in organisation between the money markets of London and New York, and indicate how these differences affect the nature and extent of the influence of the Bank of England and the Federal Reserve Bank of New York in the two markets respectively.
8. With what truth is it alleged that whereas before the war the sources of disturbance to the Foreign Exchanges automatically set in motion corrective forces, to-day this no longer tends to be so?
9. How do you account for the differences in the levels of wages normally prevailing between different countries?
10. What criteria should a Government hold in view in framing a system of taxes?

 

Tuesday, June 9, 1931.  1. 30—4. 30.
INDUSTRY AND LABOUR.

1. “It was once regarded as the duty of the State to curb the power of monopoly, but it now does everything possible to encourage it.” Discuss the truth of this statement and the desirability of the change to which it alludes.
2. Examine the effect that would be produced on the wages of skilled workers by the introduction of a national minimum weekly wage.
3. Give a reasoned account of what you imagine is likely to be the position of the British cotton industry in ten years time.
4. Describe the British Trade Boards system. What conditions are necessary for the establishment of a Trade Board in a particular industry and what conditions do you think ought to be necessary?
5. Consider how far the existence of surplus capacity in an industry can be regarded as socially undesirable.
6. “Since the war there has been a strong positive correlation between rates of real wages and unemployment.” Explain. Can any moral be drawn?
7. What are the factors that determine the size of firms? Illustrate your answer by reference to actual industries.
8. Discuss in the light of the experience of other countries the possibility of improving the efficiency of British farming on the side of (a) production, (b) marketing.
9. How far and for what reasons is labour in this country immobile at the present time? What benefits, if any, would you expect from increased mobility?
10. Is it possible for technical improvements in production to be adopted faster than is in the interests of the working classes? Illustrate your answer by reference to the conditions of to-day.

 

Monday, June 6, 1932. 9—12.
ECONOMIC THEORY.

1. Explain the difficulties involved in measuring the total utility derived from any commodity in terms of money.
2. “Under private enterprise the consumer is king.” How far do the teachings of modern psychology cast doubt upon the truth of this assertion?
3. Give examples of the way in which the development of economic theory has been moulded by the course of historical events.
4. Explain the forces which determine the value of a commodity “in the short period,” making plain what you mean by a “short period.”
5. Is the existence of monopoly (a) a necessary, (b) a sufficient condition for the existence of a system of differential prices?
6. “Since rents are merely transfer payments from one member of the community to another, it is impossible for an industry to be conducted under conditions of increasing cost from the standpoint of the community as a whole.” Discuss.
7. Is there any reason, from the standpoint of the public interest, why the freights and fares on the English railways should be maintained at a level sufficient to yield a normal rate of interest on the capital originally invested in the railways?
8. How far can the doctrine that each factor of production tends to be rewarded in accordance with its marginal productivity be applied to the factor risk-taking?
9. “Since cuts in wage-rates destroy purchasing-power, they are bound to prolong and aggravate a trade depression.” Comment.
10. Is the present pace of agricultural and industrial improvement likely in your opinion to make the problem of chronic unemployment greater in the 20th century than in the 19th?

 

Monday, June 6, 1932. 1. 30—4. 30.
CURRENCY AND BANKING.

1. “The Purchasing Power of Money is a phrase which admits, not of one, but of many meanings, some more useful than others.” Elucidate this statement.
2. Explain briefly the points at issue between the Currency and Banking Schools in the eighteen-forties. How far was the doctrine of the victorious school justified by the events?
3. What support does history afford to the contention that the gold standard leads to one set of results in theory, and to quite another set in practice?
4. “The duty of banks is to act merely as honest brokers between people who have made savings and people who want to use them.” Explain and discuss.
5. Discuss the relation between changes in long-term and in short-term rates of interest.
6. Why would you agree, or disagree, with the view that the price-level is the one passive element in the equation of exchange?
7. How do you account for the course which the prices of imported goods in this country have followed since our suspension of the gold standard in September last?
8. How far are existing arrangements as to bank reserves adapted to ensure efficient control by the Central Bank over the other banks in the London and New York money markets respectively? What alterations, if any, would you propose?
9. “The trade cycle constitutes recurrent proof of the absence of tendencies towards equilibrium in the economic system.” Examine the validity of this assertion.
10. Consider, with reference (a) to past experience, (b) to present circumstances, the relation of the export of capital to equilibrium in our balance of payments.

 

 

Tuesday, June 7, 1932. 9—12.
INDUSTRY AND TRADE.

1. Show the importance, in past years, of the emigration traffic to the shipping companies of this country and the railroad systems of the New World.
2. Give some account of the direction and composition of British overseas investment between 1850 and 1900.
3. “It is obviously to the general interest that sources of supply should grow up as near as possible to centres of consumption; subject to the condition that, where one source has a natural advantage in climate, mineral resources, or deep-set human aptitudes for a particular industry, it may be advantageously developed even at the cost of somewhat large expenditure of labour and material on marketing its products.” (Marshall.)
   Examine, in the light of this statement,
   Either (a) the aggregation of industries in Birmingham and the Black Country;
   Or (b) the location of the milling industry in North America and England.
4. Define a public utility. How would you approach the problem of whether a particular public utility should be owned and operated by the public?
5. What evidence would you require to convince you that the organised Produce Exchange renders an indispensable service to the farmer?
6. Why have the producers of agricultural staples in the New World and in England fared so badly in the last few years? What is the position in continental Europe?
7. “The 20th century has shown clearly that competitive industry never ends in complete monopoly.” Critically examine this statement.
8. Seeing that mass production gives decreasing costs, is it not reasonable to suppose that industrial progress and a falling price level will go hand in hand? Consider, in this connection, the price record of soap, automobiles, and electric power.
9. “Advertisement is a necessary business cost, but of no value to the community as a whole.” Criticise this.
10. Examine the various causes which may set a limit to the size of a business unit.

 

 

Tuesday, June 7, 1932.  1. 30—4. 30.
LABOUR.

1. “Our democratic age will be remarkable to posterity for having dimmed the time-honoured belief in the virtues of the poor” (Bosanquet). Is this fair comment on the extension of the Social Services during the past half century?
2. Discuss the effect of recent changes in the distribution of the National Income on the volume and direction of saving.
3. Discuss the probable effect on the earnings of workers in the electrical engineering industry of the introduction of a six-hour day coupled with the shift system.
4. Examine the view that the future of labour organisation lies in Industrial Unionism. Is it supported by the history of Trade Unions in this country?
5. An industrial combine employing some 30,000 people wishes to introduce a scheme for periodic consultation and discussion between management and employees. Draft an outline constitution. What subjects, if any, would you exclude from discussion?
6. Give a critical account of the history of government intervention in labour disputes in this country.
7. Consider the problems involved in the introduction of a means test for claimants to transitional payments under the Unemployment Insurance legislation.
8. Discuss the decay of apprenticeship. What alternative systems of recruitment are desirable and practicable?
9. Consider the probable effects of a permanent ban on immigration by the countries of North and South America.
10. What value do you attach to the suggestions which have been put forward for arresting the growth of unemployment by the speeding-up of expenditure on public works?

 

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PRELIMINARY EXAMINATION IN ECONOMICS.

Monday, June 5, 1933. 9—12.
PRINCIPLES OF ECONOMICS.

1. “Natura non facit saltum.” How far can this be regarded as a satisfactory axiom in Economics?
2. “It is easier to interpret the classical doctrine that ‘Rent does not enter into the cost of production’ in a sense in which it is not true, and to scoff at it, than in the sense in which it was intended and is true. It seems best therefore to avoid the phrase.” Explain and discuss.
3. State carefully the conditions which must be satisfied in order that an industry may be in long-period equilibrium.
4. In what circumstances could the distribution of the resources of a community between different uses be improved by government intervention?
5. On what theoretical grounds can the varying differences between the wages of skilled and unskilled workers in different countries be explained?
6. “The doctrine that the earnings of a worker tend to be equal to the net product of his work has by itself no real meaning: since in order to estimate net product we have to take for granted all the expenses of production of the commodity on which he works other than his own wages.” Explain the difficulty involved here.
7. What is the meaning of “normal profits”? How far is it true that profits in all industries tend to reach a uniform “normal” level?
8. If you had to calculate the most profitable method and rate of exploitation of a mine with a limited supply of ores of varying grades, what factors would you take into account?
9. Discuss the meaning which is to be attached to the word “utility” in the Theory of Value.
10. “Increasing and diminishing returns are attributes rather of production as a whole than of production in one individual industry.” Discuss.
11. In what circumstances if any would you regard it as desirable that a seller should discriminate in the prices charged to different consumers?
12. “The chief factors determining the rate of interest are the growth of population and the rate of invention.” Discuss.

 

Monday, June 5, 1933. 1½—4½ .
INDUSTRY, LABOUR AND MONEY.

Paper I.

1. How far is it true to say that the world gold standard before the War was (i) automatic, (ii) managed, (iii) dependent upon the economic and financial policy of England?
2. “The Quantity Theory of Money throws no light upon the forces which most directly and actively influence the price level.” Discuss this statement.
3. “The limit of wealth is never deficiency of consumers but deficiency of productive power” (John Stuart Mill). Discuss.
4. To what extent do you consider that the progressive supersession of private businesses by joint stock companies has been a gain from the point of view of the community as a whole?
5. Compare, with reference to any industries with which you are familiar, the relative importance of proximity to the market and proximity to the source of raw materials as factors in determining industrial localisation.
6. Give an account of the difficulties which confront the Lancashire cotton industry in the world markets to-day. What remedies have been attempted or proposed in recent years for improving the position of the industry?
7. How far does the nature of the product determine the possibilities of success in the co-operative marketing of agricultural produce?
8. “In disputes between employers and workpeople, the stoppage of work is analogous to a war, or still more to a trade embargo, in disputes between nations.” Discuss.
9. Give a rough estimate of the proportions of workpeople whose wage-rates are laid down in collective agreements, or fixed by the various statutory wages boards. How far and in what way do these wage-rates affect the levels of wages in unorganised and unregulated trades and services?
10. Discuss compulsory arbitration in labour disputes from the standpoint of (a) principle, (b) practice, with illustrations from experience at home or abroad.

 

Tuesday, June 6, 1933. 1½—4½.
INDUSTRY, LABOUR AND MONEY.

Paper II.

1. What would be the probable effects on the economic system of a country which was previously in equilibrium, if the people were to decide to save an additional £100 million per annum and to put the whole of the money thus saved on deposit account with the banks?
2. Assuming that an important cause of the present depression in England lies in the fact that prices are below the level of costs, consider the relative merits of attempting (a) to raise prices to meet costs, (b) to lower costs to meet prices.

	December 1931	December 1932
Treasury Bills outstanding…	£m. 605	£m. 928
Deposits of 12 Joint Stock Banks	£m. 1,806	£m. 2,049
Advances of 12 Joint Stock Banks	£m. 918	£m. 785
Investments of 12 Joint Stock Banks	£m. 298	£m. 488
Bankers’ Deposits at Bank of England	£m. 82	£m. 134
Wholesale prices (1927=100)	65.8	61.1

How do you account for the changes shown in the above table?

4. Do you consider that discrimination against road transport in favour of the railways would be advantageous to the community as a whole in England to-day?
5. “‘The optimum firm’ is a meaningless phrase unless we know the price of machinery, the rate of interest and the rate of invention in a given industry.” Discuss this statement.
6. “The typical manufacturer of the more elaborate goods tends to become little more than an assembler of components bought from specialist makers.” How far is this true? What effects, if any, is it likely to have on labour and industrial organisation?
7. Why have so many countries been compelled to take special steps for the re-organisation of their agriculture?
8. In a firm belonging to an industry in which employers and workpeople are well organised, a dispute arises between some of the workpeople and the management as to how many workers, of what grade, and at what wage, shall operate a new type of machine. Describe the kind of agreements that are likely to exist for settling the issue without a stoppage of work, and sketch the procedure.
9. “Under well organised production the distinction between payment by time and payment by results disappears. The manager who introduces or retains piece-work or bonus systems thereby stands confessed a second-rate organiser.” Discuss.
10. Discuss the changes in the functions and status of the foreman consequent upon “scientific management” and “labour control,” and the problems such changes create.
11. Recount briefly the history of any joint industrial council of employers and employed. Discuss the causes of its successes and failures and suggest any reforms you think desirable.

 

Tuesday, June 6, 1933. 9—12.
MODERN ECONOMIC HISTORY.

1. “Mercantilism was the economic expression of the militant nationalism which sprang out of the social and political changes of the sixteenth century.” Discuss this. Was mercantilism peculiar to England?
2. Estimate the importance of Spanish silver to the development of capitalism in Great Britain and Europe.
3. Why was England the mother country of the Industrial Revolution?
4. Did John Law seriously damage the economic and financial position of France?
5. Explain the steps by which England originally reached a gold standard.
6. What was the teaching of Malthus on the subject of population? Was his problem our problem?
7. Estimate the economic consequences of the Napoleonic regime to Western Europe.
8. Examine the points at issue between the Currency and Banking Schools in the 1840’s.
9. Show the relation between the corn law controversy (1813 to 1846) and the formation of economic theory.
10. How did German thought and policy between 1800 and the death of Bismarck react to English fiscal doctrine?
11. Give some account of the rise of Socialism on the continent of Europe.

 

Source:  Cambridge University. Economics Tripos Papers 1931-1933, with the Papers Set in the Intercollegiate and Preliminary Examinations 1931-1933. Cambridge, UK: University Press, 1933, pp. 71-83.

Source: Trinity College, Cambridge University. Library of Congress Prints and Photographs Division Washington, D.C.