Category: Chicago

Categories
Chicago Exam Questions Microeconomics

Chicago. Price Theory Prelim Exam. Summer Quarter, 1968

by Roger Vaughan (Chicago PhD 1977)

 

Links to previously posted Chicago prelim exams.

___________________________

CORE EXAMINATION

Price Theory
Summer, 1968

Preliminary Examination for the Ph.D. Degree

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

Your Code Number and NOT your name
Name of Examination
Date of Examination

Results of the examination will be sent to you by letter.

Answer all questions.  Time: 3 hours.  [Handwritten: Return question sheets with blue books.]

  1. (70 points) Indicate whether each of the following statements is true, false, or uncertain, and explain briefly
    1. The competitive demand for an input to a production process is never more elastic than the demand for the product of the production process.
    2. An ad valorem tax on the sale of gasoline for highway use would produce a more stable flow of revenue for the state than does the (existing) specific tax.
    3. If the growers of oranges increase their own consumption of oranges more than they increase the total output of oranges when orange prices rise, oranges must be an inferior good.
    4. Because a monopolist has no supply curve, one cannot predict the effect of, say, a ten per cent tax on his output.
    5. In designing an investment project, the firm should attempt to maximize the internal rate of return.
    6. It is inconsistent to explain the rise in the price of a security by “heavier buying” and a fall by “heavier selling.”
    7. For an individual, the sum of the income elasticities of demand for all commodities is unity, and similarly, the sum of their price elasticities is zero.
    8. Within a crop season, September to September, it is impossible for the actual June price to be below the actual March price of wheat because of storage costs.
    9. One would expect the price elasticity of demand for food to be lower in poorer countries than in rich ones simply because food accounts for a larger fraction of the budget in the former.
    10. If the marginal product of labor depends only upon the ratio of labor to capital, and similarly with capital, the competitive firm will have constant returns to scale.
    11. No product can have an elasticity of demand of unity throughout its entire range because no one can pay the nearly infinite price for extremely small quantities.
    12. In order that the amount of food marketed by the agricultural sector be inversely related to price, it is required that the income elasticity of demand for non-food items in that sector be increasing with income.
    13. An excise tax collected from the buyer can never differ in its effect from the same tax collected from the seller.
    14. If production occurs under conditions of constant returns to scale, the marginal product of an input always declines as the relative quantity of that input increases, hence short-run marginal cost always increases with increases in output.
  2. Essay Questions [Handwritten: “Part II. Answer all questions.”]
    1. (25 points)
      Ronald Coase has argued, in an important article on “The Problem of Social Cost” that in the absence of transaction costs, there would be no external economies: every one affected by an action would enter a contract to alter the action. Monopoly behavior has external diseconomies: the costs are borne by the customers but the benefits accrue to the monopolist. How, in the absence of transaction costs, would the monopolists and their customers behave?
    2. (30 points)
      Recent federal legislation authorizes a regulatory body to require various changes in automobiles to increase safety. The cost of the requirements for 1967-68 model cars is estimated at $50 to $100 per car, or $500 million to $1 billion in the aggregate.

      1. How will these regulations affect the prices of used automobiles?
      2. Assuming buyers of automobiles act “rationally” and with full information, are there any safety devices that are in the social interest that will not be installed in response to consumer demand?
      3. If automobile producers were made liable for all damages to occupants of automobiles in accidents, would the socially optimum amount of safety be built into automobiles?
    3. (25 points)
      Suppose that the armed forces wishes to recruit a given number of men. One alternative would be to set a wage such that the number of volunteers equaled the number desired. Another way would be to set a lower wage and to draft a number of men equal to the difference between the number wanted and the number volunteering. In the latter case, assume that each person receiving a draft call would be permitted to hire a substitute for himself or to sell himself as a substitute for some other person. Compare these two schemes in terms of the number of personnel secured, the total pay received by the men, and the sources of this pay. Do not concern yourself with either the existing scheme or probable changes therein.
    4. (30 points)
      The English are much concerned about a “brain drain,” that is, the emigration of highly educated workers. Answer the following questions, assuming constant returns to scale.

      1. Is there any difference, in the effects on the per capita income of those remaining behind, between the emigration of a professional worker and the emigration of a non-professional worker who takes an equivalent amount of capital with him?
      2. Suppose one unskilled worker emigrates with £100 (his per capita share of England’s capital). Will the per capita effects be different–on those who remain–than if one-third of the English labor force migrates?
      3. Reverting to the “brain drain,” will it make any difference–to those who remain–whether the education of the skilled emigrants was paid for by themselves or subsidized by the state?
      4. How will the immigration of these workers into the United States affect U.S. skilled and unskilled workers?

Source:  Harvard University Archives. Papers of Zvi Griliches, Box 130, Folder “Preliminary Examinations, 1965-1968.”

Image Source: “The School of Chicago 1972” by Robert Vaughan at theHarvard University Archives. Papers of Zvi Griliches, Box 129. Folder “Posters, ca. 1960s-1970s”.

__________________________

Preliminary and Field Exams from the economics graduate program of the University of Chicago

Note: The chronological ordering of quarters at the University of Chicago during a calendar year goes Winter, Spring, Summer, Autumn. For this reason the following is arranged chronologically.

Categories
Chicago Exam Questions Theory

Chicago. Economic Theory Prelim Exam. Summer Quarter, 1958

Element from Social Science Research Bldg at U of Chicago

 

Links to previously posted Chicago prelim exams.

___________________________

ECONOMIC THEORY PRELIMINARY EXAMINATION

SUMMER, 1958
AUGUST 1, 1958

ANSWER ALL QUESTIONS

The true-false-uncertain questions, as a group, and the essay questions, as a group, are to be given equal weight in grading the examination.

GROUP I

Indicate in the space provided the correct answer–True (T), False (F), or Uncertain (U). Explain your answer in the space provided on the pages following. Do not write more than can be included in the space provided. [Note: four T-F-U questions fit on a single page]

True (T), False (F), Uncertain (U)

  1. _____ A negative income elasticity of demand implies a positive price elasticity.
  2. _____ The demand curve for leisure is upward sloping.
  3. _____ Steel prices and output usually move together during business cycles. This means that the income effect of a rise in price is greater than the substitution effect.
  4. _____ If the price elasticity of demand is -1.0 each for commodities A and B separately, then the price elasticity of A and B taken together, the price elasticity of the joint demand for A and B, can be higher than -1.0 in absolute value.
  5. _____ When average costs are increasing, marginal costs are also increasing.
  6. _____ Prices that change only rarely constitute evidence of monopoly power.
  7. _____ A proportional income tax will have no effect on occupational choice, while a progressive income tax (same total revenue) does have an effect.
  8. _____ The price elasticity of demand for an input depends mainly upon the elasticity of demand for the final product and the relative share of total costs represented by payments for the specific input.
  9. _____ Inputs A and B are used in the production of the same product. An increase in the price of A (due to a shift in the supply function for A) will result in a decline in the price of B.
  10. _____ If the rate of interest is stable over time, firms may change the ratio of machines to labor.
  11. _____ When the borrowing and lending rates facing a firm differ, a firm may make the appropriate investment decision by maximizing the present value of the firm.
  12. _____ If the amount of capital which a firm can invest is fixed, it will choose the same investment whether it maximizes the average internal rate of return or the present value of the investment.
  13. _____ The long-run elasticity of supply of labor per person (supply measured in hours of work per lifetime) cannot exceed unity numerically.
  14. _____ The white persons who gain the most by market discrimination against Negroes are those with the greatest tastes for discrimination against Negroes.
  15. _____ If a union succeeds in raising wages, it will cause the ratio of the costs of the union labor to total costs to rise.
  16. _____ An effective minimum wage law will tend to cause labor to move out of employments having relatively great net non-pecuniary advantages.
  17. _____ Since the marginal productivity of labor rises as the ratio of capital to labor rises, wages will be higher in industries with high capital-labor ratios than in industries with low capital-labor ratios.
  18. _____ Long-run marginal cost cannot exceed short-run marginal cost.
  19. _____ If the price of wheat in market A is $2.00 per bushel and the cost of transporting a bushel of wheat from market A to market B is $0.10, the price of wheat in market B is $2.10.
  20. _____ If equal percentage changes in labor and land lead to the same percentage change in the output of wheat, and if labor yields increasing average products, the world’s wheat could be grown in a flower pot, if the pot were small enough.

GROUP II

  1. Describe briefly the major contributions of the following economists:

(1) W.S. Jevons
(2) A.A. Cournot
(3) V. Pareto
(4) Irving Fisher

  1. —
    1. The demand function for a product is P = 115-Q. The total cost of producing Q units in one plant is given by
      TC = 40Q – 10Q² + Q³. Only one-plant firms are allowed.

      1. What is the long run competitive solution (price and quantity)? [Handwritten margin note: “…and the number of firms in the industry”]
      2. What would be the approximate price charged and the quantity produced if there was only one one-plant firm and it maximized its profits. (Work only with round figures.) How much profit would it make?
    2. Assume now that a firm may have more than one plant. What is the monopoly solution? [Handwritten addition: “How much profit will it make?”]
  1. The C.E. Company, a mining company, currently operates a commissary at which employees of the company may obtain free of charge a variety of food and clothing items. The amount of each item that an employee may obtain per week may not exceed a specified amount (ration), the same for all employees. The company proposes to close the commissary next month and simultaneously to give the employees an increase in weekly wages equal to half the market value of the ration. The company, learning that you are an economist, has asked you whether the putting into effect of their proposal would increase, decrease, or leave unchanged the real weekly wages of its employees.
    1. Could you give them a definite answer without additional information? Explain.
    2. If your answer to (A) is “no”, what additional information, if any, would enable you to be certain that their proposal would decrease real weekly wages? Would increase real weekly wages? Would leave real weekly wages unchanged? Explain your answers.
  2. A study of the relationship between changes in employment by industry groups and changes in wage rates for the period from 1929 to date in the United States does not reveal a significant positive relationship between the two variables, i.e., larger changes in employment were not associated with larger changes in wage rates.
    Comment on this result in terms of the degree of competition in labor markets and the effect of wage differentials in inducing labor transfers.
    What would have been the implications if there had been a positive correlation between the variables? If there had been a negative relationship?

Source:  Harvard University Archives. Papers of Zvi Griliches, Box 130, Folder “Preliminary Examinations, 1957-1965.”

Image Source: University of Chicago Photographic Archive, apf2-07449, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.

__________________________

Preliminary and Field Exams from the economics graduate program of the University of Chicago

Note: The chronological ordering of quarters at the University of Chicago during a calendar year goes Winter, Spring, Summer, Autumn. For this reason the following is arranged chronologically.

 

Categories
Chicago Exam Questions Microeconomics

Chicago. Price Theory Prelim Exam. Winter Quarter, 1968

Links to previously posted Chicago prelim exams.

___________________________

PRICE THEORY

Preliminary Examination
for the Ph.D. and the A.M. Degree
Winter Quarter, 1968

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

Your code number and NOT your name
Name of examination
Date of examination

Results of the examination will be sent to you by letter

Answer all questions.  Time: 3 hours

  1. Indicate whether each of the following statements is True (T) or False (F), and justify your answer briefly.
    1. ________ Consider a competitive firm’s demand for a factor of production as a function of the factor price for given prices of other factors. In case A, also hold output fixed. In case B, instead hold the price of the product fixed. The elasticity of demand is greater for B than A.
    2. ________ Firms will devote no more resources to accident prevention when they pay the costs of employees injured by industrial accidents than they would if the employees bore the costs.
    3. ________ The demand elasticity for Ford cars is -4.2; the elasticity for Chevrolet cars is -3.0. If Ford’s market share is 1/3 and Chevrolet’s is 2/3, then the elasticity of both brands together is -3.4.
    4. ________ If Congress passes safety legislation outlawing the use of automobiles over 7 years old, in the long run, the number of automobiles on the road will be decreased but the annual purchases of new automobiles will be increased.
    5. ________ Nightclubs often have an admission or cover charge in addition to the price of food or drinks. This implies the absence of marginal cost pricing.
    6. ________ A patent usually entitles the owner of an invention to charge as much as he wishes for the right to use his invention. Hence, a patented cost-reducing invention will not affect the price of the product because the optimal royalty rate will just equal the cost reduction.
    7. ________ A rational person may gamble at unfair odds.
    8. ________ Since we observe that competitive firms operate their plants at a higher rate at business cycle peaks than at business cycle troughs, they must be operating in the range of rising short-run marginal costs.
    9. ________ The recent rise in the postage rate was accompanied by a “shortage” of stamps, providing us with an example of the Giffen paradox.
    10. ________ “Time is money,” hence an invention which decreased the hours required for sleep would lead to a rise in real income as conventionally measured.

II. —

    1. How is it possible for coffee beans of the same brand and same freshness to sell at a higher price per pound than the same coffee ground and canned?
    2. The same typewriter could have recently been bought at $130 from Toad Hall, $125 from Sears under its own label, and for $117 from a mail-order discount house (Monroe). Does this mean that the retail typewriter market is very imperfect?
    3. Some years back, when the Federal campaign against cigarette smoking was beginning, Time reported that “when someone offers a cigarette to pipe-puffing Surgeon General Luther Terry, he always grabs it. ‘Every one I accept I tear up,’ he says. ‘That way there’s one less cigarette.'”
      Analyze the economics of the Surgeon General’s policy. In doing so, assume, of course, that a substantial class of people with similar beliefs behave the same way, so the effect is at least potentially appreciable. Would it contribute to his objective of reducing smoking? If so, through what channels?
  1. Suppose a traffic department enforcing parking regulations in the business section of a large city has a fixed force available to it which means an approximately constant probability p that an illegally parked car will be ticketed. Assume that each person has the choice of parking legally at X dollars per day or illegally, paying a fine of F dollars each time his car is ticketed.
    1. Assume first the sole aim of the traffic department is to discourage illegal parking. Assume that all drivers have constant marginal utility of income and try to maximize expected money income (i.e., minimize their expected loss from parking). What fine F should the traffic department impose on parking in order to achieve its aim?
    2. If all drivers maximized expected utility, had diminishing marginal utility of income, and experienced neither utility nor disutility from obeying the law, how would this affect your answer to a? If they had increasing marginal utility of income?
    3. Suppose the traffic department received all the fines and desired to maximize its expected revenue. How should it set the fine F? Indicate what additional information, if any, it needs in order to do so.
  1. Assume that production functions are Cobb-Douglas of the first degree and that competition reigns. Let there be only two factors, say, labor (L) and capital (C).
    1. What is the Cobb-Douglas form?
    2. Show that the share of wages in the total output is independent of the quantity of labor, and equal to the exponent of labor, say, a.
    3. Let there be one additional worker.
      1. Because wages are equal to marginal product, he gets the whole of what he adds to output.
      2. Yet by (b), labor gets only the fraction a of the additional output.

How do you reconcile (i) and (ii)?

  1. “The exemption of college students from the draft has been attacked as discrimination in favor of middle and upper income classes. Yet a cold-blooded economic analysis shows that in fact it promotes greater equality in the distribution of income, and so benefits the lower-income classes.”
    Provide the “cold-blooded economic analysis.”

Source:  Harvard University Archives. Papers of Zvi Griliches, Box 130, Folder “Preliminary Examinations, 1965-1968.”

__________________________

Preliminary and Field Exams from the economics graduate program of the University of Chicago

Note: The chronological ordering of quarters at the University of Chicago during a calendar year goes Winter, Spring, Summer, Autumn. For this reason the following is arranged chronologically.

 

Categories
Agricultural Economics Chicago Policy

Chicago. Agricultural political economy of the Marshall Plan. T.W. Schultz, 1948

The first of the two newspaper clippings below was found in the economics department file in the papers of the University of Chicago president Robert M. Hutchins. Owning Harvard appears to have worked as click-bait in Chicago for quite some time.

__________________________

U.C. Professor Tells Off Harvard
On Marshall Plan

BY GEORGE WELLER
Daily News Foreign Service

CAMBRIDGE, Mass. — A farm-bred teacher from the University of Chicago boldly gave Harvard the hotfoot on the Marshall plan last weekend.

Charging in substance that the Marshall plan has become a gigantic export racket, Prof. Theodore Schultz, head of Chicago’s department of economics, provided Harvard’s dominantly pro-Marshall faculty and students with their stiffest criticism in months.

Schultz’s challenge, that the Marshall plan is actually an adventure in state-trading contrary to American principles, has set Cambridge buzzing.

Sees Profit Motive

The Chicagoan told meetings of both students and professors that well-heeled lobbies of industrialists and farmers were backing the European recovery program for profits rather than for European recovery.

The Marshall plan in operation, if not in inspiration, is prolonging artificial ‘prosperity’ by government buying of surpluses at inflated prices, Schultz charged.

The views of this Midwesterner, who is known for leading the ‘oleomargarine revolt’ at Iowa State University [See: Paul B. Burnett (2011) “Academic Freedom or Political Maneuvers: Theodore W. Schultz and the Oleomargarine Controversy Revisited”.], broke with star-shell effect at Harvard because only Communist or Wallace opposition to the Marshall plan has so far gained much hearing.

The ambassadors of France, Britain and the Netherlands are lecturing here in favor of European aid.

“Dumping Operation”

Schultz threw discord into this chorus of agreement by charging that the Marshall plan is actually a vast dumping operation aimed to relieve a glut of farm and industrial products and head off price declines.

Schultz agreed with Harvard’s distribution expert, Prof. Seymour Harris, that many American middlemen, besides manufacturers and farmers, are planning to get their slices of Marshall money before aid leaves American shores.

Advance Orders

The Chicago teacher said he knew cases where European governments had placed advance orders with American exporters for filling only if Marshall aid is voted. Such conditional orders encouraged lobbies to push the Marshall plan through Congress, he suggested.

The Marshall plan is causing another split in American foreign policy, Schultz pointed out.

While American delegates at the Havana world trade conference are fighting subsidies and dumping, the Marshall plan is promoting state-supported exports on a colossal scale, Schultz warned.

Source: Chicago Daily News, Tues., March 2, 1948.

__________________________

Foreign Aid Held Possible Price Lever

The Marshall plan may be used by the government as a tool for keeping commodity prices high, Dr. Theodore Schultz, chairman of the University of Chicago department of economics, said yesterday. He also asserted food prices would have been 30 per cent lower in 1946 and 1947 if all food exported in those years had been retained in this country.

Schultz addressed the frozen food industry convention in the Stevens hotel sponsored by the National Association of Frozen Food Packers. He warned that the United States is in danger of drifting into a policy of dumping food supplies.

Plan “Misuse Likely”

“We are likely to misuse the European recovery program in this way by using it to support the existing commodity price policy,” he said. “When prunes or other commodities fall to the support level specified by parity, the Commodity Credit corporation will go into action and buy, routing its purchases to the European program. What could be simpler.”

In the few years immediately preceding World War II, 97.4 per cent of the United States’ food supply, including food imported as well as that produced in this country, was consumed domestically, said Schultz. In 1946 and 1947 only 90 per cent of the supply was made available to people in the United States. Had that 7.4 per cent difference been kept at home, it would have been enough to lower food prices approximately 30 per cent, he asserted.

Predicts Price Drop

Schultz predicted that most farm commodity prices would recede to 10 per cent below parity in three to five years, and assailed the parity system as obsolete. He said if the government maintains commodities at floor levels (10 per cent below parity on most) in a depression, it will “clog channels of trade” and make food prices higher than they otherwise would be.

Source: Chicago Daily Tribune. 18 March 1948.

Image Source: Theodore W. Schultz. University of Chicago Photographic Archive, apf1-07484. Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.

Categories
Chicago Economics Programs Faculty Regulations

Chicago. Requirements for M.A. and Ph.D. Degrees in Economics, 1934-35

The requirements for a graduate degree in economics at the University of Chicago in 1934-35 are transcribed below. First we have general Division requirements. These are followed by the specific requirements determined by the economics department.

Earlier, Economics in the Rear-view Mirror has transcribed the analogous requirements at Harvard University in 1934-35 and those for Columbia University in 1934-35.

Chicago, 1892.
Chicago, 1903.
Chicago, 1904-05 (with thick course descriptions)

_______________________

[DIVISION] REQUIREMENTS
FOR HIGHER DEGREES
UNDER THE OLD PLAN
[pp. 7-9]

In order to avoid misunderstandings, candidates for higher degrees should consult their Deans concerning all technical requirements for such degrees, including foreign language examinations, and requirements for the final oral examinations, before application is made for admission to candidacy. In all cases candidates should consult early with the chairman of the department of specialization.

Degrees will not be conferred under this plan after the Summer Quarter, 1935.

THE MASTER’S DEGREE

Two degrees are conferred, viz., Master of Arts and Master of Science.

  1. Candidacy. —Any student who has been in attendance one quarter or more, whose undergraduate course is equivalent to that required for a corresponding Bachelor’s degree in the University of Chicago,* and whose dissertation subject has been approved by the department of specialization, may, on recommendation by the department and approval of the divisional faculty, be admitted to candidacy for a Master’s degree. The student should consult his dean with reference to the requirements for admission to candidacy. The application must be on file in that office at least two months before the degree is conferred.
  2. Requirements.—-Students thus accepted as candidates will be given a Master’s degree on fulfilment of the following requirements:
    1. At least 8 courses of satisfactory advanced work taken in residence at the University of Chicago, of which not more than the equivalent of three courses may be taken as half-courses. These 8 courses need not be all in one department, but are selected from courses taken in residence at the University of Chicago according to some rational plan approved by the chairman of the department and by the Dean at least six months before the degree is conferred.
      At the discretion of the department concerned, and corresponding registration in advance with the Deans, wide reading or other special work carried out by the student under the supervision of the department and subject to such tests as the department may prescribe, may be accepted as one or more courses of the required work.
    2. A satisfactory dissertation on a subject approved by the head (or chairman) of the department at least three months (earlier at the option of the department) before graduation.
    3. The delivery of three printed or typewritten copies of the dissertation together with a certificate signed by the chairman of the department, that the work, as submitted, is accepted as the candidate’s dissertation for the Master’s degree to Cobb Lecture Hall, Room 203, at least two weeks before the Convocation at which the degree is to be conferred.
    4. Subsequent to admission to candidacy, a satisfactory final examination on the work taken for the degree. When the examination is oral, the candidate must file six copies of a summary of his dissertation and six copies of the list of courses submitted for the examination in the office of the Dean ten days before the date of examination.
    5. Additional qualitative and specific requirements for the degree may be prescribed by any department or faculty.

[Note]

*Attention is particularly called to the fact the term “equivalent” in this connection refers to quantity only. It does not affect the question of the specific Master’s degree (Arts or Science) to which a given student’s work would lead. In case the candidate did not obtain his Bachelor’s degree at the University of Chicago, he will present to the Director of Admissions on blanks furnished for the purpose a detailed statement of his undergraduate work. The Director of Admissions cannot always report upon these statements during the opening week of the quarter.

THE DEGREE OF DOCTOR OF PHILOSOPHY

The degree of Doctor of Philosophy is given in recognition of high attainments and ability in the candidate’s chosen field, shown, first, by a dissertation evincing power of independent investigation and forming an actual contribution to existing knowledge; and, secondly, by passing an examination covering the general field of the candidate’s subject. It is to be understood explicitly that this degree is not conferred on the completion of a specified number of courses, or after a given period of residence.

  1. Candidacy.—Any student of graduate status in the University, who has been in attendance one quarter or more (one month, in the case of a student entering with two years of residence graduate credit from another institution), whose thesis subject has been accepted by the head (or chairman) of the department, and who has a reading knowledge of French and German, may, on recommendation of the department and approval of the divisional faculty, be enrolled as a candidate for the degree of Doctor of Philosophy. On recommendation of a department, approved by the Dean, any other Germanic language may be substituted for German and any other Romance language for French. A reading knowledge of the foreign languages must be certified by the appropriate departments and the application for admission to candidacy must be filed by the applicant at the Dean’s office on the blank provided for that purpose not fewer than eight calendar months before the final examination for the degree. Responsibility for admission at the proper time rests with the student.
  2. Requirements.—Students accepted as candidates will be given the Doctor of Philosophy degree upon the fulfilment of the following requirements:
    1. Normally three years of residence work in pursuance of an accepted course of study, at least three full quarters of which shall be in residence at the University of Chicago.
    2. The work offered in fulfilment of the requirements for the degree of Doctor of Philosophy in any department is outlined by that department and approved by the Dean, for each candidate, not later than the first quarter of his last year of residence work. The work required includes such courses in allied departments as may be deemed necessary by the department of specialization. The work is selected with regard to the needs of the individual student, with the double purpose (1) of giving him a knowledge of the relations of his subject to cognate branches of learning, and (2) of preparing him for productive scholarship.
    3. The presentation of a satisfactory dissertation upon a subject which has been approved by the chairman of the department.
    4. A satisfactory final oral examination on the subject presented for the degree.
  3. Dissertation.—
    1. Each candidate prepares a dissertation upon some topic connected with the subject of his specialization. This production constitutes an actual contribution to knowledge. Its subject is submitted for approval to the head (or chairman) of the department concerned at least twelve months before the date of the final examination.
    2. The dissertation is submitted to the Department in typewritten form at least one month before the date of the final examination, unless otherwise recommended by the Department.
    3. Three weeks before the Convocation at which the degree is to be conferred, unless the candidate is prepared to deposit 100 bound copies of the complete dissertation, he must deliver at the Dissertation Desk, Cobb Lecture Hall, Room 203, three printed or typewritten copies of the dissertation, together with a certificate signed by the chairman of the department that the work, as submitted, is accepted as the candidate’s dissertation for the degree of Doctor of Philosophy and approved for publication without alteration.
    4. For details concerning the publication and distribution of dissertations, the candidate is referred to the Handbook of the Divisions and the Professional Schools, obtainable at the office of the Dean.
  4. Final examination. —After admission to candidacy the student may present himself for the final oral examination as soon as he has fulfilled the other general and departmental requirements. The candidate prepares a typewritten or printed brief of his work, including an analysis of the dissertation, and files six copies of the same with his Dean ten days before the time set for the examination.
    The examination for the degree of Doctor of Philosophy shall be taken at least ten days before the Convocation at which the degree is to be conferred
  5. Non-resident work.—After being admitted to graduate status, the student, in some cases, may be allowed to substitute non-resident work for resident work to a limited extent, under conditions to be arranged in consultation with the Dean and the heads of the departments concerned.
  6. Work done in other universities.—Graduate work done in another university will be accepted as equivalent to resident work in the University of Chicago, provided the institution in which the work was done is of high standing, and adequate evidence is furnished that the work done there was satisfactorily performed. Graduate work done in other institutions, and credit allowed for non-resident work, cannot reduce the residence requirement at the University of Chicago to a period of less than one year (three full quarters), during which the major part of the student’s time will be spent in the department in which he expects to take his degree.

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

ECONOMICS, HIGHER DEGREES
[ DEPARTMENT REQUIREMENTS]
[pp. 282-284]

The Department expects that students who are candidates for the Master’s or the Doctor’s degree in Economics will observe the special departmental requirements set forth below, in addition to the general regulations of the Division, stated on pages 274-75 of the Announcements.

THE DEGREE OF MASTER OF ARTS

Candidates for the Master’s degree should file with the Departmental Examiner, on or before the opening of their second quarter of residence, a complete statement of the work they intend to offer. The Examiner will submit this schedule to the Department for approval.

The specific requirements for the Master’s degree are:

  1. A minimum of 8 courses, or their equivalent (of which at least 6 must be in Grades II and III above). At some previous time the candidate should have covered the substantial equivalent of the requirements for the Bachelor’s degree in Economics. This equivalence may be shown by courses taken or by examination. The candidate must also have the preparation in the other social sciences required for the Bachelor’s degree at the University.
  2. A thesis involving research of at least semi-independent character. The thesis should be completed and three copies delivered to the office of the Department for examination at least six weeks before the Convocation at which the degree is to be conferred.
  3. A final examination. This may be either oral or written as decided by the Depart-ment. The examination will be on the thesis and its field; and one other field proposed by the candidate and approved by the Department.
  4. All candidates for the Master’s degree, whether or not courses in general economic theory are included among the courses specifically offered for the degree, are expected to show, in examination and throughout their work, ability to think clearly and effectively on abstract economic questions, and familiarity with the terms and common concepts of economic science.
THE DEGREE OF DOCTOR OF PHILOSOPHY

A candidate for the Doctor’s degree in Economics is expected to have a reading knowledge of French and German, or one of these languages and a second modern language approved by the Department, the preparation in the other social sciences required for the Bachelor’s degree at the University, and such grounding in other technical, scientific, or philosophical subjects as may be necessary for an intelligent pursuit of the studies in which he proposes to specialize. He should have covered the substantial equivalent of the requirements for the Bachelor’s degree in Economics at the University, and must be able to deal on a graduate level with the range of material covered in the sequence for that degree. The following courses or their equivalents should be included as part of his preparation: 209, “Intermediate Economic Theory”; 210, “Introduction to Accounting”; 211, “Introduction to Statistics”; 220, “Economic History of the United States”; 221, “Economic History of Classical and Western European Civilization”; and 230, “Introduction to Money and Banking.”

The candidate is expected to have general training in the important fields listed below and to specialize in three fields, one of which must be Economic Theory, including Monetary and Cycle Theory, and another must be the field of his thesis. The fields to be chosen (in addition to Economic Theory) may be taken from (1) Statistics; (2) Accounting; (3) Economic History; (4) Finance and Financial Administration; (5) Government Finance; (6) Labor and Personnel Administration; (7) Trusts and Public Utilities; (8) International Economic Relations; (9) some other field proposed by the candidate. A field proposed by the candidate may be in Economics or in another social science, the arrangement in either case being made with the Department of Economics. It is desired to develop that program of work which best meets the needs of the individual student. This usually involves the election of some courses in other departments and possibly the development of a field in another social science as a substitute for one of the fields in economics.

The candidate’s grasp of his three fields of specialization is tested by preliminary written examinations which must be passed to the satisfaction of the Department before admission to candidacy. The final oral examination is on the field of concentration and on the thesis. The written examinations can be taken in one quarter or they can be divided between two quarters, not necessarily consecutive quarters, at the option of the candidate. The written examinations are given in the sixth, seventh, and eighth weeks of the Autumn, Spring, and Summer quarters. The written examination in general economic theory, including monetary and cycle theory, is in two parts and will require five hours in all. The written examination in each of the other fields requires from three to four hours. Notice of intention to take any written examination must be filed with the Department at least three weeks before the examinations begin. In written examinations for the doctorate the questions cover both the theoretical and administrative aspects of the field.

The thesis must indicate power of independent investigation and form a significant contribution to existing knowledge.

The final examination for the Doctor’s degree is an oral examination in the field of the student’s special work and on the thesis. The purpose of this examination is to test the quality of the candidate’s scholarship as evidenced by his mastery of his special field and by his ability to deal originally, critically, and authoritatively with problems in that field. He is expected to show a discriminating acquaintance with the literature and with both the historical and theoretical aspects of his subject, and to have intelligent opinions on current events within the range of his special knowledge. He will not be expected at the final examination to answer detailed questions on subjects not immediately related to his specialty.

It is the desire and policy of the Department that advanced students, in planning their studies, should not confine their attention to courses of formal instruction. Students of proved ability are so far as is practicable relieved from the routine requirements of ordinary courses of instruction and given large opportunities for individual reading and inquiry in connection with special courses of research.

Source: The College and the Divisions for the Sessions of 1934-35 in Announcements [of] the University of Chicago, Vol. 34.

Image Source: Coat of arms of the University of Chicago.

The University Coat of Arms, a shield displaying the phoenix below and the book and motto above, was adopted by the Board of Trustees on August 16, 1910. The University motto Crescat scientia; vita excolatur was adopted by the Board on January 17, 1911 and added to the Coat of Arms on the pages of the open book.
The Coat of Arms was designed by Pierre de Chaignon la Rose, a heraldic specialist in Boston working under contract to the Board of Trustees. No surviving documents make clear precisely why the phoenix was adopted as the central element on the Coat of Arms, but the most probable assumption is that the phoenix can be seen as a symbol of the city of Chicago, which was seriously damaged by the great Chicago Fire of 1871 and then was successfully rebuilt, or reborn, within just a few years.

Categories
Budgets Chicago Economist Market Economists

Chicago. Economics Department Budget Proposal for 1944-45 by Simeon Leland, Feb 1944

The 1944-45 budget file for the department of economics consists of a three page spreadsheet, is followed by fifteen pages of line item justifications for changes signed by the chairman of the department Simeon E. Leland and a one page budget memorandum by the assistant comptroller (Lincicome) to the Vice President (Filbey). This is an informationally rich document.

For this posting I have converted the item rows of the budget spreadsheet into individual columns for the items. The separate items have then been paired with the line item justifications.

An excerpt from a 1945 development plan by Chairman Leland for the department has been transcribed and posted.

___________________________________

Named in the Instructional Budget, 1944-45

Bloch, Henry S.

Buchanan, Daniel H.

Burns, Robert K.

Douglas, Paul H.

Harbison, Frederick H.

Johnson, Gale

Knight, Frank H.

Krueger, Maynard C.

Leland, Simeon E.

Lange, Oscar

Lewis, H. Gregg

Marschak, Jacob

McGuire, Christine H. (Mrs. Jules Masserman)

Meyer, Gerhard E. O.

Mints, Lloyd W.

Nef, John U.

Schultz, Theodore W.

Simons, Henry C.

Viner, Jacob

Wright, Chester W.

___________________________________

The University of Chicago
Budget and Appointment Recommendations
1944-45

Division of the Social Sciences
Department of Economics

February 21, 1944

Departmental Recommendations

In presenting the Budget for 1944-45, I am transmitting the recommendations of the Professors in the Department of Economics as decided upon at their meeting February 15, 1944. The specific recommendations, save as to dissents where their own welfare was involved, were unanimous. For convenience, the recommendations are presented in two divisions: (I) The college; (II) The Department. An attempt is also made to consider problems of the future development of the Department.

  1. The College

Recommendations concerning those members of the College staff who have status in the Department will be appended hereto when they are received from Dean Faust. As in the past, the Department has no responsibility in connection with the College and hence does not assume responsibility for recommendations in the College. The Department is glad to incorporate in its budget or transmit through customary channels any recommendations Dean Faust desires to make.

  1. The Department

The recommendations of the Professors in the Department can be classified under four convenient headings: (A) Advancements in Rank and Increases in Salaries Related Thereto; (B) Recommendations as to Changes in Salaries; (C) Appointments ;(D) Future Development of the Department; (E) Recommendations as to Service and Equipment.

Instructional Budget Account
Item No. 1-20
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)
Tenure
Present Expira.
New appointment
From
Yrs.
Service Basis
Number of quarters
If part-time, approx. %
Salary Level
1943-44 $54,600)
Proposed
Chairman $65,550)
Dean
President’s Recommendation
Rank
Salary Level [….]
Amount 1944-45

___________________________________

Items requiring no change
in rank or salary

Professor Jacob Viner
Item No. 1
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Viner, Jacob, Prof.
Tenure
Present Expira. Sept….
New appointment
From
Yrs.
Service Basis
Number of quarters 3
If part-time, approx. %
Salary Level
1943-44 $10,000
Proposed
Chairman $10,000
Dean
President’s Recommendation
Rank
Salary Level
Amount 1944-45

___________________________________

Professor T. W. Schultz
Item No. 4
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Schultz, T.W., Prof.
Tenure
Present Expira. Sept….
New appointment
From
Yrs.
Service Basis
Number of quarters 3
If part-time, approx. %
Salary Level
1943-44 $9,000
Proposed
Chairman $9,000
Dean
President’s Recommendation
Rank
Salary Level
Amount 1944-45

___________________________________

Professor Jacob Marschak
Item No. 6
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Marschak, Jacob, Prof.
([Paid by] Commission
Tenure
Present Expira. Dec….
New appointment
From
Yrs.
Service Basis
Number of quarters 3 [in Economics]
4 [in Cowles]
If part-time, approx. % 50% [Economics]
50% [Cowles]
Salary Level
1943-44 $7,500 Total
From Economics $3,750
From  Cowles $3,750
Proposed
Chairman $7,500 Total
From Economics $3,750
From  Cowles, $3,750
Dean
President’s Recommendation
Rank
Salary Level
Amount 1944-45

___________________________________

Professor Paul H. Douglas
Item No. 7
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Douglas, P.H., Prof.
(On leave, 10/1/42—enlisted)
Tenure
Present Expira. Sept….
New appointment
From
Yrs.
Service Basis
Number of quarters 3
If part-time, approx. %
Salary Level
1943-44 ($7,000)
Proposed
Chairman ($7,000)
Dean
President’s Recommendation
Rank
Salary Level
Amount 1944-45

___________________________________

Assistant Professor Frederick H. Harbison
Item No. 13
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Harbison, F. H., Asst. Prof.
(On leave [to 9/30/44] Government Service)
Tenure
Present Expira. Sept. 45
New appointment
From
Yrs.
Service Basis
Number of quarters 3
If part-time, approx. %
Salary Level
1943-44 ($4,000)
Proposed
Chairman $4,000
Dean
President’s Recommendation
Rank
Salary Level [4,000]
Amount 1944-45

___________________________________

  1. Advancements in Rank and Increases in Salaries Related Thereto

[Note: All departmental recommendations for an advancement in rank were rejected by the President’s Office.]

___________________________________

Associate Professor Lloyd W. Mints

[11] The Department recommends that the rank of Lloyd W. Mints be changed from Associate Professor to Professor of Economics. Mr. Mints has been a member of the staff since 1920, rising successively from Instructor to Assistant Professor to Associate Professor. He has earned the respect of students and colleagues for the thoroughness of his teaching and for his insight into economic and monetary theory. He has been a willing worker and has carried a heavy load of administrative routine for many years in connection with the advising of students. The Department has considered this recommendation on several occasions within the last few years and expected to make the recommendation at a time when Mints’ book on A History of Banking Theory would appear. Through no fault of his own the publication of this work — the fruition of several years’ research — has been delayed due to the war and the shortage of paper. Harper and Brothers have the manuscript in their possession and have agreed to publish it, but because of market difficulties plus rationing of paper stocks actual publication will probably be postponed for some time. It does not seem fair to delay this promotion in hope of finding a strategic occasion for its presentation. If one looks ahead to retirement and the possibility of accumulating a satisfactory annuity, the earlier this promotion is given the greater will be its worth to Mr. Mints. On the other hand, delay may tend to impair morale and produce discouragement, especially when the length of Mints’s service to the University is considered. It is recommended that Mr. Mints’s salary be increased $1,000.

Item No. 11
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Mints, L. W., Prof.
(Assoc. Prof.)
Tenure
Present Expira. Sept. 45
New appointment
From 10/1/44
Yrs. [Ind]
Service Basis
Number of quarters 3
If part-time, approx. %
Salary Level
1943-44 $4,000
Proposed
Chairman $5,000
Dean Ac. Prof.
President’s Recommendation
Rank
Salary Level [$4,500]
Amount 1944-45

___________________________________

Associate Professor Henry C. Simons

[10] The Department recommends the promotion of Henry C. Simons from Associate Professor to Professor of Economics. Simons has earned the reputation here and among his peers at other institutions of being a brilliant economist. His powers of theoretical analysis are equaled by few men: his scintillating suggestions as to public policy in the fields in which he has written have been widely recognized and favorably quoted; his writings have an originality and style which matches the subjective contributions of his works. Simons’ opinions on many economic subjects are eagerly sought. The Department recommends that his salary be increased $1,500. The recommendations as to advancement in rank and increase in salary will also be supported by the Law School, to which Simons devotes ono-third of his time.

See the Law School recommendations, Item 12. Since the present contract for the Civil Affairs Training Program does not extend throughout the year 1944-45, provision must be made in the regular budget for the salary if a new appointment is to be made from the budget.

Item No. 10
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)

Simons, H.C., Prof.
(Assoc. Prof)
Tenure
Present Expira. Sept….
New appointment
From 10/1/44
Yrs. [Ind]
Service Basis
Number of quarters 3
If part-time, approx. % 67 (Econ.)
33 (Law School)
Salary Level
1943-44

$4,500 (Total)

$3,000 (Econ.)
$1,500 (Law School)
Proposed
Chairman $6,000
$4,000 (Econ.)
$2,000 (Law School)
Dean [Ac. Prof]
President’s Recommendation
Rank [Ac. Prof]
Salary Level [$5,000 (Total)]
[$3,333 (Econ.)]
[$1,667 (Law School])
Amount 1944-45

___________________________________

Instructor H. Gregg Lewis

[14] The Department proposes that H. Gregg Lewis be promoted from Instructor to Assistant Professor and that his salary be increased $500, effective upon his return to the University at the close of the war. His work merits this recognition. By the time he returns, it is believed that Lewis will have received his Ph.D. His dissertation is in final stages of preparation.

The leave must be extended if the salary is not to be included in the budget totals.

Item No. 14
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)

Lewis, H. G. Asst. Prof.

(Instructor)
(On leave, Govt. Serv. To 9-30-44 to be extended to 9/30/45)
Tenure
Present Expira. Sept. 44
New appointment
From 10/1/44
Yrs. 3
Service Basis
Number of quarters 3
If part-time, approx. %
Salary Level
1943-44 ($3,500)
Proposed
Chairman ($4,000)
Dean
President’s Recommendation
Rank [Instructor]
Salary Level
Amount 1944-45 [$4,000]

___________________________________

Lecturer Robert K. Burns

[15] The Department desires to recommend the appointment of Robert K. Burns as Assistant Professor, to serve the University on a half-time basis at a stipend of $2,000 per annum. Burns, who holds the title of Lecturer, has carried the bulk of the work of the Department in the field of labor during the past two years. Not only has he carried a heavy instructional load but he has supervised class research, and dissertations as well. Burns has been Regional Director of the War Labor Board in Chicago and has recently been transferred to the Washington office to direct certain new activities of the Board. This promotion came as a recognition of outstanding work. How soon Burns could assume increased responsibilities in the University is not known, but any time his services can be made available the Department is in a position to utilize them effectively. With Harbison and Douglas also in the field of labor, it is believed that a half-time appointment for Burns is all that is now required.

Item No. 15
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Burns, R. E., Asst Prof.
(Lecturer, part time).
Tenure
Present Expira. June, 44
New appointment
From 7/1/44
Yrs. 3
Service Basis
Number of quarters 3
If part-time, approx. % 50
Salary Level
1943-44 $1,400
Proposed
Chairman $2,000
Dean
President’s Recommendation
Rank [Lect]
Salary Level [$2000]
Amount 1944-45

___________________________________

  1. Changes in Salaries

Professor Frank H. Knight

[2] The Department, over the protest of Frank H. Knight, recommends to the Division that Knight’s salary be increased $1,500 so as to place his compensation on the $10,000 level. If a Distinguished Professorship is available, Knight should receive it; if such a Professorship is unavailable, Knight should receive a stipend as though he were so honored. He is known throughout the world as one of its outstanding economists. His reputation and scholarship extend to the fields of philosophy, ethics, religion, and history, to name but a few. His fellow economists have honored him on many occasions; he has represented them for many years on learned societies. He has been tempted with offers from other institutions. He has been made a Professor of the Social Sciences in recognition of the breadth of his competence. Honor is bestowed on him everywhere; only the University can give him the freedom from financial ills he sorely needs and deserves. His present salary is an embarrassment to the Department, even though it is all charged against the Division.

Item No. 2
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Knight, F. H., Prof.
(also Soc.Sci.Div.Instr.
Tenure
Present Expira. June….
New appointment
From
Yrs.
Service Basis
Number of quarters 3
If part-time, approx. %
Salary Level
1943-44 $8,500
From Econ. ….
From Soc.Sci.Div. $8,500
Proposed
Chairman $10,000
From Econ. ….
From Soc.Sci.Div. $10,000
Dean
President’s Recommendation
Rank
Salary Level From Soc.Sci.Div. [$9,000) 4]
Amount 1944-45

___________________________________

Professor John U. Nef

[5] The Department would like to recommend an increase in salary of $1,000 for John U. Nef, but Nef says that he will not hear of it nor accept an increase in compensation. The Department believes that such an increase is well deserved and wants its recommendation to be recorded even if Mr. Nef declines to receive what is manifestly his due.

Item No. 5
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Nef, J.H., Prof.
(also History
Tenure
Present Expira. Sept….
New appointment
From [10/1/44]
Yrs. [Ind]
Service Basis
Number of quarters 3 [in Economics and History]
If part-time, approx. % 50% [Economics]
50% [History]
Salary Level
1943-44 $7,500 Total
From Econ. $3,750
From  Hist. $3,750
Proposed
Chairman $8,500 Total
From Econ. $4,750
From  Hist., $3,750
Dean
President’s Recommendation
Rank
Salary Level [$8,000 Total]
[From Econ. $4,250]
[From  Hist. $3,750 (4]
Amount 1944-45

___________________________________

Professor Oscar Lange

[9] The Department recommends an increase in salary of $500 for Oscar Lange. When Lange returned to the University of Chicago after a year’s leave at Columbia, he did so at a distinct financial sacrifice. Any continuation of that disadvantage should be removed. It is the opinion of the Department, too, that Simons and Lange should be treated equally with respect to salary and rank. In view of the salary proposed for Mr. Simons, this increase is doubly appropriate.

Item No. 9
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Lange, Oscar, Prof.
Tenure
Present Expira. June….
New appointment
From [7/1/44]
Yrs. [Ind]
Service Basis
Number of quarters 3
If part-time, approx. %
Salary Level
1943-44 $5,500
Proposed
Chairman $6,000
Dean
President’s Recommendation
Rank
Salary Level [$6000]
Amount 1944-45

___________________________________

  1. Appointments

Professor Simeon E. Leland

The new appointment information should be inserted for the position of Chairman.

Item No. 3
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Leland, S.E., Prof. and Chairman
(also Political Sci.
Tenure
Present Expira.

June….

[As Chairman Jun 44]
New appointment
From [7-1-44]
[As chairman 7-1-44]
Yrs. Ind [as Prof]
3 yrs [as chairman]
Service Basis
Number of quarters 3 [in Economics and Pol. Sci.]
If part-time, approx. % 50% [Economics]
50% [Political Sci.]
Salary Level
1943-44 $8,000 Total
From Econ. $4,000
From  Pol.Sci. $4,000
Proposed
Chairman $8,000 Total
From Econ. $4,000
From  Pol.Sci. $4,000
Dean $9,000 Total
From Econ. $4,500
From  Pol.Sci. $4,500
President’s Recommendation
Rank
Salary Level [$9,000 Total]
[From Econ. $4,500]
[From  Pol.Sci. $4,500 (4]
Amount 1944-45

___________________________________

Professor Chester W. Wright

[8] At the end of the present year Chester W. Wright becomes Professor Emeritus. Up to the present time the Department has been unable to fill Professor Wright’s post. Outstanding scholars of American Economic History are few; promising young men are scarce. Professor Wright’s health and energy are unimpaired. He is at the peak of his career. His recently completed Economic History of the United States is an outstanding achievement. The Department believes that Professor Wright should be invited to remain at the University during the coming year on a half-time basis. The continuance of his work and his presence here will make easier the finding as well as the appointment of a successor. As long aa Professor Wright is in the city the University will be the beneficiary of his work on Library acquisitions. His painstaking labors in the Library over a period of years is reflected in the excellence of the collections of books in Economics and Social Sciences — collections which include rare books, historic volumes and current issues, making our Library one of the best of university libraries.

The desirability of the renewal of Professor Wright’s appointment is strengthened by the fact that Mr. Harold Innis of the University of Toronto, to whom a Professorship in the Department has been offered, has declined our offer for the duration due to his feeling of responsibility toward his own institution in the present emergency. Innis has indicated that when the war is over he will be glad to reconsider our offer. Due also to his great regard for Professor Wright, the renewal of Wright’s appointment for the duration (on a year-to-year basis, as may be required) will be an important factor in inducing Innis to come to the University of Chicago. Probably more than any one person, Wright may be able eventually to induce Innis to join the staff.

If Innis does come to the University of Chicago, he will doubtless wish to devote his attention to Canadian economic history and only gradually devote his energies to continental developments. It will be necessary, therefore, to bring in a young man to teach United States economic history. As has been indicated, promising candidates are hard to find and the Department is unable to recommend a person for appointment at this time. Both Professors Wright and Nef emphasize the difficulties of this task. And, if a recommendation is to be made, the candidate must enjoy the support of senior professors in this field. All of which strengthens the recommendation of the Department for the continuance of Professor Wright’s teaching.

Is the proposed salary to be in addition to the retiring allowance at $3,000 per year?

Item No. 8
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Wright, C. W., Prof. Emer.
(Prof.)
[(also Retiring Allowance
(Total Salary]
Tenure
Present Expira. Sept. 44
New appointment
From [10/1/44]
Yrs. 1
Service Basis
Number of quarters 3
If part-time, approx. % 50
Salary Level
1943-44 $6,500
Proposed
Chairman $3,250
Dean
President’s Recommendation
Rank [Retire 10/1/44]
Salary Level
Amount 1944-45 [$1625]

___________________________________

Instructor Henry S. Bloch

[16] It is recommended that the appointment of Henry S. Bloch as instructor be renewed. Bloch at present is devoting his time exclusively to the CATS program, where his salary is charged. Should that training program be liquidated, Bloch’s services can be transferred immediately to Departmental teaching, research, and assistance in advising students. During the past year such needs have arisen, but because of the demands of the military program Bloch has not been able to assist the Department in its civilian program. Attention is called to the fact that Bloch’s salary is on a four-quarter basis.

Our payroll department states that the present appointment for Mr. Bloch at $2,200 per year is charged to the Economics budget and expires June 30, 1944. There is no record of the appointment chargeable to the Civil Affairs Specialists Training Program. Will you please check your records. Also, since the Training Program contract does not cover 1944-45, it is assumed that any salary for next year must be included in the department totals.

Item No. 16
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Bloch, H. S., Inst.
(also CATS).
Tenure
Present Expira. 9/30/44
New appointment
From 10/1/44
Yrs. 1
Service Basis
Number of quarters 4
If part-time, approx. %
Salary Level
1943-44 $3,600 (CATS)
Proposed
Chairman $3,600 (CATS)
Dean
President’s Recommendation
Rank
Salary Level [$3,600 (CATS)]
Amount 1944-45

___________________________________

Visiting Professor D. H. Buchanan

[12] D. H. Buchanan of the University of North Carolina is a Visiting Professor assisting in the military training program of the University. It is our understanding that his appointment is for the duration or during the continuance of the military training program. Mr. Buchanan’s salary has been charged against the CATS budget and I presume his appointment will continue at the same rate and so long as this program continues. Buchanan is included in this budget only for the sake of completeness.

Item No. 12
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Buchanan, D. H., Vis. Prof.
(also CATS
Tenure
Present Expira. Aug. 44
New appointment 9/1/44 (CATS)
From 10/1/44
Yrs. 1
Service Basis
Number of quarters 4
If part-time, approx. %
Salary Level
1943-44 $8,000 (CATS)
Proposed
Chairman $8,000 (CATS)
Dean

[Do not appoint]

[illegible word]
President’s Recommendation
Rank
Salary Level
Amount 1944-45

___________________________________

Research Associate Gale Johnson

[18] The appointment of Gale Johnson as a Research Associate in Agricultural Economics at a four-quarter stipend of $3,700 was recommended during the current year to provide research assistance for Professor T. W. Schultz. Johnson’s appointment will commence as of April 1, 1944.

Item No. 18
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Johnson, Gale, Res.Assoc. in Agri. Economics
Tenure
Present Expira. 6/30/44
New appointment
From 7/1/44
Yrs. 1
Service Basis
Number of quarters 4
If part-time, approx. %
Salary Level
1943-44 $3,700
Proposed
Chairman $3,700
Dean
President’s Recommendation
Rank
Salary Level
Amount 1944-45

___________________________________

Lecturer John K. Langum

[17] The Department recommends the appointment of John K. Langum, Vice President of the Federal Reserve Bank of Chicago in charge of the Bank’s economic research and statistics, as Lecturer in Banking and Banking Policy. The Department would like to appoint Langum as a Lecturer, with the expectation that the arrangement would continue for many years to the mutual advantage of both institutions. A stipend of $500 is proposed, in return for which Langum would be invited during two Quarters of the academic year to give a seminar or series of evening lectures on current topics in banking and banking policy. These lectures should greatly strengthen the work of the University in the field of banking, a defect in our training and research of which we have long been cognizant. We are anxious to make the appointment at an early date, but will make the expenditure of funds contingent upon adequacy of registrations.

The Langum appointment should bring credit to the University. He is well and favorably known in economic and banking circles. He holds his Ph.D. from the University of Minnesota. He is the author of numerous articles in his field. Recently he has prepared a monograph which the Committee on Economic Development is to publish.

Item No. 17
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Langum, J.K., Lecturer
Tenure
Present Expira.
New appointment
From 1/1/45 (Winter and Spring Quarters)
Yrs.
Service Basis
Number of quarters 2
If part-time, approx. % Pt.
Salary Level
1943-44
Proposed
Chairman $500
Dean
President’s Recommendation
Rank
Salary Level [$500]
Amount 1944-45

___________________________________

Items 12a, 13a, 15, 1, and 16a are inserted since the individuals have appointments extending beyond June 30, 1944.

Professor Maynard C. Krueger
Item No. [12a]
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 [Krueger, M. C. As Prof.
(also College]
Tenure
Present Expira. [Sept. 44]
New appointment
From
Yrs.
Service Basis
Number of quarters
If part-time, approx. %
Salary Level
1943-44 [$4,000]
Proposed
Chairman [$4,000) 4]
Dean
President’s Recommendation
Rank
Salary Level [$4,000]
Amount 1944-45

___________________________________

Assistant Prof. Gerhard E.O. Meyer
Item No. [13a]
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 [Meyer, G.E.O. As. Prof.
(also College]
Tenure
Present Expira. [Sept. 44]
New appointment
From
Yrs.
Service Basis
Number of quarters
If part-time, approx. %
Salary Level
1943-44 [$2,700]
Proposed
Chairman [$3,500) 4]
Dean
President’s Recommendation
Rank
Salary Level [$4,000]
Amount 1944-45

From the spreadsheet it is not clear about the breakdown of source of funding between the Department of Economics and the College.

___________________________________

Instructor/Dean of Students Christine McGuire Masserman

Note: items 15a and 16a refer to the same person. Christine H. McGuire (who married the psychiatrist Jules H. Masserman).  Christine H. McGuire is listed in the U.S. National Register of Scientific and Technical Personnel, 1921-1970 as having received a master’s degree in 1938. She later moved from teaching economics to

Item No. [15a]
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 [McGuire, Christine (Mrs. Jules H. Masserman), Inst.
(also College and Dean of Students]
Tenure
Present Expira. [Sept 44]
New appointment
From
Yrs. 1
Service Basis
Number of quarters 4
If part-time, approx. %
Salary Level
1943-44 [$2,000
Proposed
Chairman
Dean [$2,000 Total
College (?) $1,500 )4
Economics (?) $500)4]
President’s Recommendation
Rank
Salary Level [$2,000 Total
College (?) $1,500 )4
Economics (?) $500)4]
Amount 1944-45
Instructor C. H. Masserman
Item No. 16a
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 [Masserman, H. H., Inst.]
Tenure
Present Expira. [Sept 44]
New appointment
From
Yrs.
Service Basis
Number of quarters
If part-time, approx. %
Salary Level
1943-44 [$2,000]
Proposed
Chairman
Dean
President’s Recommendation
Rank
Salary Level
Amount 1944-45


___________________________________

 

  1. The Future Development of the Department

 

From time to time the Department has called attention to its future needs. It has appraised its deficiencies and has projected problems certain to arise with the retirement of its staff. Some of the problems are still unsolved; one has been solved with brilliance and good fortune.

1. Agriculture

During the past year one of the long standing weaknesses of the Department was cured with the appointment of T. W. Schultz as Professor of Agricultural Economics. With his coming, two important developments can be undertaken. First, a plan for joint degrees in Agricultural Economics cooperatively undertaken by a few selected land grant colleges can be developed. Already we are negotiating with Purdue University to see if we can agree on the details and administration of such a plan. Second, we hope to introduce Agricultural Economics as a field to be studied by undergraduates in the typical four-year college program. At the present time economics departments throughout the country do not call the attention of students to the problems of agriculture either in the so-called “applied economics” courses or in their general survey courses. This is partly due to the fact of specialization, in which work in agriculture and in agricultural economics has been developed almost exclusively in the land grant colleges. It is also due to the fact that few students as part of their graduate education have been exposed to courses In Agricultural Economics. The Department is offering courses in Agricultural Economics to students as part of a general educational program and as part of their training for advanced degrees. Eventually this should bring to the student in urban colleges of liberal arts, where our students are employed, a better understanding of the problems of agriculture. Sooner or later the general courses in economics should deal with agricultural questions just as they now give attention, for example, to the problems of labor, capital, transportation, taxation, or business organization. It is believed that our Department is pioneering in this field, thanks to the active support and encouragement of the University.

2. Transportation

In times past the Department has called attention to the need for strengthening the work offered in Railroads and Transportation. Chicago is the strategic place for the development of advanced training and research in these related fields. It is the railroad center of the United States; it is its central airport; it is a dominant market for railroad equipment and supplies, and during the war has become an important airplane parts manufacturing center. Motor bus and truck-line activities teem in and around Chicago. To meet this opportunity, the University boasts of but one professor whose interests are largely centered in railroad freight rates and who in recent years has typically been on leave. More emphasis in the future should be given to transportation by motor vehicles and airplanes. A major professorial appointment should be contemplated in the field of transportation.

3. Trusts and Monopolies

The retirement of Professor Wright raises the question as to what should be done with respect to teaching and research in the field of Trusts, Monopolies and Business Combinations. Once each year Professor Wright has given a course in Trusts which from the point of view of training of graduate students has been adequate. The decrease in student enrollment during the war has not made the problem critical. The renewal of Professor Wright’s appointment will solve the question for another year.

The field of Trusts alone is not one of sufficient importance, It is believed, to justify a full-time staff appointment. It could easily be combined with Public Utilities or the Control of Business, depending upon the interests of possible candidates for appointment, but some provision should be made to cover this field in the near future.

4. Public Utilities and Control of Business

The offerings of the Department in the field of Public Utilities has been scant, if courses and research over the years are listed. This is true even if the offerings of other Departments and Schools are taken into account. Prior to the depression, efforts were made to make a professorial appointment in this field. Unfortunately, the nominees of the Department could not be induced to join the faculty. Visiting professors were employed on several occasions but with the advent of the depression this practice had to be discontinued. It may be doubted whether Public Utilities is as important a field as it was over a decade ago. Emphasis now has shifted to the Control of Business, with the regulation of public utilities, the dissolution of trusts and the reduction of competition as phases of larger general problems. The control of business by government (and perhaps by other institutions) has long been of interest to economists and political scientists, as well as business men. It has likewise been the concern of lawyers.

The field is of increasing importance in the future. An outstanding professorial appointment would greatly strengthen the University as a whole.

5. Advanced Statistical Theory

In proposing a joint professorship with the Mathematics Department for Professor Abraham Wald, the Department gave expression to a long-felt desire to expand the work of the University in the field of advanced mathematical theory as applied to statistics. Such an appointment with mathematical advice and consultation available to the faculty on their own research and teaching problems would be invaluable. On the whole, the training of students is secondary to this need and service. By such an appointment our research could be strengthened greatly. It offers the opportunity, too, to develop graduate work in the field of statistics far beyond present limits. It is believed that this view and this conception is shared by the Mathematics Department.

As a matter of University policy a closer integration of courses, training and research in the field of statistics would seem to be desirable. The Institute of Statistics has made progress in this direction. More and more the foundations and advanced training in the field should center in the Mathematics Department, with applications being taught in other Departments and Schools. A major appointment such as the one proposed for Wald would strengthen and facilitate these developments.

Although Wald declined our offer, the Department hopes to join Mr. Bartky, Professor of Applied Mathematics, Associate Dean and Dean of Students in the Division of the Physical Sciences and Chairman of the Institute of Statistics, and Mr. Lane, Chairman of the Department of Mathematics, in presenting another recommendation for an outstanding appointment in this field. Such an appointment is a University need which the Department of Economics shares. The Department will help in any way it can to bring about a noteworthy appointment.

6. Joint Appointments with Other Departments

In suggesting appointments in the fields of Trusts and Monopolies, Railroads and Transportation, Public Utilities and the Control of Business, Advanced Mathematical and Statistical Theory, the Department is cognizant of the fact that University resources are limited and that at any time only the most urgent or most important things can be done. Other Departments and Schools, as well as our own, have problems and claims for financial support. Without attempting to weigh the importance of alternative claims or uses for funds, the recommendations of the Department have been made because we think they are important. They represent a portion of a program oriented toward the future.

In making the suggestions enumerated, appointments to the Department of Economics are not being urged per se. Most of the problems also concern other Departments and Schools. In these fields joint appointments are in order. Thereby other parts of the University as well as our own Department would be strengthened. An appointment in Trusts and Monopolies concerns both the Law School and the Department of Political Science, as well as Economics; Railroads and Transportation also concerns the School of Business; Public Utilities and Control of Business should involve Law, Political Science, Business, and Economics; Urban Planning involves the Departments of Geography, Political Science, Economics and the Schools of Law and Business; Social Legislation affects Social Service Administration, Law and Economics. If the University is interested in furthering this suggested development, the Department is ready to take the initiative. Joint appointments will help us improve our Department, its research and teaching.

7. Visiting Professors

Whenever a need arises or a deficiency becomes evident, the easy solution is to suggest “an outstanding appointment.” This may also be the most costly solution even though it may temporarily increase the size, the number of course offerings or the ego of particular departments. It tends to increase the emphasis on less important aspects of particular branches of knowledge. It expends the applications, or the applied courses, rather than the basic elements of theory or science. The growth and strength of certain departments may be increased by concentrating on the development of the fundamental aspects of their subject matter by the regular full-time members of their faculty and by funds spent on increasing the eminence of this central group, the requisite diversification of teaching or research being secured by means of visiting professorships, continuously utilized to cover first one peripheral subject and then another. By bringing to the Department various men for one or two quarters a year, the best they have to offer both in instruction of students and stimulation of faculty colleagues can be secured at relatively low cost. As different men are brought to the Department the gains from this policy can be extended first to one field and then to another. If it is pursued regularly, it will soon become a tradition that new people with unique contributions to supplement those of the regular staff are always in residence in the Department of Economies at the University of Chicago. The Visiting Professorships should be chosen quite as much for their ability to stimulate and educate their faculty colleagues as to enrich the graduate program, though it is hard to see how one could take place without the other.

Next year may not be the time to inaugurate this policy due to difficulties connected with the war and the possible decrease in exceptional graduate students who would profit most from it, but it is urged that the plan be given a careful trial over a period of several years, within which the Department be allowed to experiment freely to see what could be accomplished. It is suggested that $5,000 per annum be placed at the disposal of the Department for 3 to 5 years to see what it can do for itself and the University in the execution of this policy. If it can not demonstrate the gains from this policy, it should be held to account for its failure.

8. Departmental Lectures

A similar line of thought prompts the Department to ask in addition for the sum of $600 per annum for expenditure on occasional lectures to be given by individuals doing new and unique things about which staff members and their best students would otherwise remain ignorant. Such lectures would have little popular appeal and would attract few outside of the Department, but they would give the faculty the benefit of discoveries, hypotheses an ideas before they become current in the profession. Such Iectures could find their way into print via the Journal of Political Economy, Econometrica, or otherwise, as might be determined. The $600 requested would probably provide only two or three such lectures a year due to the payment of expenses and honoraria.

9. A Special Fund for Student Assistance

The suggestion has been made that there be included among the worthy projects to be submitted to prospective donors proposals for the creation of Departmental Funds for the Assistance of Brilliant Students, such as the Littauer Fund now available at Harvard. This would not be a loan fund but a source of grants-in-aid to supplement fellowships, scholarships, loans and other assistance and would be administered by the respective departments which are close to students, and are, therefore, familiar with their needs. A study of the results attained by the Littauer Center might well justify the search for a similar fund.

  1. Recommendations as to Service and Equipment

The Department is unanimous in recommending an increase in salary of at least $35.00 per month for Mrs. Margaret Finnamore who by vote of the faculty has been acting as Secretary of the Department. If it is possible to have this title confirmed and a new salary classification adopted so as to give effect to the work now being performed by Mrs. Finnamore, the wishes of the Department will be carried out. [“]In running the Department, Mrs. Finnamore is the most essential person.”

The Department feels that it is appropriate to increase the salary of Mrs. Marian Woodyard from $145 to $150 per month.

With the continued increase in members of the Department and the increase in their scholarly output, present clerical and stenographic facilities are inadequate. The situation was eased somewhat last year by the addition of $500 to our Equipment and Expense Account. This sum has been utilized to provide additional typing service for staff members but the need can only be met by the addition of one full-time clerk-stenographer. To provide this assistance and to take care of the salary changes recommended above an increase of $2,040 is needed in our Service Account. (I have reduced our Equipment and Expense Account by $500.)

Item No. 21
Account No. 2624 Service
Name and Proposed Rank
(Old rank in parenthesis if change recommended)
Tenure
Present Expira.
New appointment
From
Yrs.
Service Basis
Number of quarters
If part-time, approx. %
Salary Level
1943-44 $3,960)
Proposed
Chairman $6,000
Dean
President’s Recommendation
Rank
Salary Level [$6,000]
Amount 1944-45

Equipment and Expense

Item No. 22
Account No. 2625 Equipment and Expense
Name and Proposed Rank
(Old rank in parenthesis if change recommended)
Tenure
Present Expira.
New appointment
From
Yrs.
Service Basis
Number of quarters
If part-time, approx. %
Salary Level
1943-44 $1,360
Proposed
Chairman $860
Dean
President’s Recommendation
Rank
Salary Level
Amount 1944-45

An independent check on the present volume of office and stenographic work, as well as its work-program for the future, would be welcomed to test the reasonableness of this recommendation.

Respectfully submitted,
[signed] Simeon E. Leland

___________________________________

Three items crossed out of economics departmental budget by President

Visiting Professors

Item No. 19
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Visiting Professors
Tenure
Present Expira.
New appointment
From  
Yrs.
Service Basis
Number of quarters
If part-time, approx. %
Salary Level
1943-44
Proposed
Chairman $600
Dean
President’s Recommendation
Rank
Salary Level [….]
Amount 1944-45

Lecturers

Item No. 20
Account No. 2621 Instruction
Name and Proposed Rank
(Old rank in parenthesis if change recommended)		 Lecturers
Tenure
Present Expira.
New appointment
From
Yrs.
Service Basis
Number of quarters
If part-time, approx. %
Salary Level
1943-44
Proposed
Chairman $5,000
Dean
President’s Recommendation
Rank
Salary Level [….]
Amount 1944-45

 

Agricultural Economic Research & Development

Item No. 23
Account No. 2626 Agricultural Economic Research & Development
Name and Proposed Rank
(Old rank in parenthesis if change recommended)
Tenure
Present Expira.
New appointment
From
Yrs.
Service Basis
Number of quarters
If part-time, approx. %
Salary Level
1943-44 $5,000
Proposed
Chairman $5,000
Dean
President’s Recommendation
Rank
Salary Level
Amount 1944-45 [In Division Budget]

 ___________________________________

Source: University of Chicago Library. Department of Special Collections. Office of the President. Hutchins Administration Records. Box 284, Folder “Economics, 1943-1947”.

Image Source: Portrait of Simeon E. Leland. University of Chicago Photographic Archive, apf1-03716, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library. Image colorized by Economics in the Rear-view Mirror.

Categories
Chicago Exam Questions Theory

Chicago. Preliminary Exam in Economic Theory, Summer 1956

One oddity in the economic theory preliminary examination from the summer quarter of 1956 transcribed below is that the True-False-Uncertain section consisted of 23 questions for a total of 140 points.

The mimeographed copy of the exam was fished from the papers of Zvi Griliches (U. Chicago Ph.D., 1957) at Harvard University Archives.

_________________________

Previously transcribed and posted Preliminary and Field Exams from the economics graduate program of the University of Chicago

Note: The chronological ordering of quarters at the University of Chicago during a calendar year goes Winter, Spring, Summer, Autumn. For this reason the following is arranged chronologically.

_________________________

ECONOMIC THEORY
Preliminary Examination
Summer Quarter 1956

Write your number and not your name on your examination paper. Answer all questions. Time: 4 hours.
Total points: 240.

I. (140 points) True, False, or Uncertain. Explain your answer in each case. Your score will depend heavily on your explanations.
  1. If a firm is producing in the region of rising marginal costs, the firm is realizing profits.
  2. If a commodity has a negative income elasticity, the function relating price and quantity consumed may have a positive slope.
  3. If two goods are substitutes in consumption, a fall in the price of one will always result in a fall in the price of the other.
  4. A demand schedule for labor shows the amount of labor in physical units that will be taken at each wage. A demand schedule for capital shows the amount of capital in physical units that will be taken at each interest rate.
  5. For a single consumer, the sum of the income elasticities of demand for all commodities is unity, while the sum of their price elasticities is zero.
  6. An excise tax affects the allocation of resources among different uses, whereas an income tax does not.
  7. The competitive firm attempts to equalize price, marginal cost and average cost.
  8. The marginal cost of producing a commodity is equal to the price of any one factor divided by its marginal physical product, even though many factors are used in producing the commodity.
  9. An effective price ceiling on cotton, i.e., one that holds its price below the free market level, will decrease the market price of textiles.
  10. A subsidy of a fixed number of dollars per unit of output might be used as part of a program to control a monopoly in the public interest.
  11. If the “true cost of living” for a consumer is interpreted to mean the cost of staying on a given indifference surface, then upper and lower limits for the change in a consumer’s true cost of living between period 0 and period 1 are given respectively by the Laspeyres and Paasche indexes using the consumer’s own purchases as weights.
  12. The supply curve for the output of a monopolist is inelastic at the point of maximum monopoly profit.
  13. Resources are seriously misallocated in the broadcasting industry in the U.S., through the fact that the cost of broadcasts is borne by advertisers rather than by listeners and viewers directly.
  14. The rate of interest in a stationary state would be zero.
  15. It is a convention in economics to draw consumption indifference curves convex to the origin, but we have no way of knowing whether they really are.
  16. Assume that if the prices of farm products fall farmers will expend more effort in an attempt to maintain their income. Under these circumstances, a reduction in effective farm price supports will increase the volume of farm surpluses.
  17. If a worker’s utility function in the two dimensions, (1) leisure and (2) all other goods and services, is homogeneous of first degree, then his supply curve of labor will be backward sloping.
  18. If it takes one day to catch a beaver and two to catch a deer, one deer will exchange for two beavers.
  19. Almost all railroads are reported to have gross revenues from dining car service that are less than the direct expenses of providing the service. In their own interest the railroads should increase the price of dining car meals.
  20. Because of the facts stated in number 19, the railroads should discontinue dining car service.
  21. The elasticity of a linear supply function that passes through the origin is always unity.
  22. The price of haircuts in Chicago is approximately 40 per cent higher than in New York; therefore, average earnings of barbers in Chicago are higher than in New York.
  23. Take it as a fact that grade one cocoa commands a premium on world markets over inferior grades; that the Nigerian Cocoa Marketing Board (which is the sole purchaser from producers) has set a differential between grades in prices paid to producers wider than the world market differential; and that they have succeeded in this way in raising sharply the proportion of Nigerian production which is grade one. By so doing, they have greatly improved the efficiency of the Nigerian economy.
II. (60 points)

The competitive private enterprise form of economic organization is regarded by many economists as a sort of ideal which it would be desirable to approximate in practice.

(a) On a purely theoretical level, use the tools of economic analysis to explain to a skeptic precisely in what way(s) and why the competitive private enterprise form is so good. State whatever assumptions and define whatever terms you require, and state explicitly the criteria of excellence that you are using.

(b) Assume an economy that is perfectly competitive. What important economic problems, if any, may still be unsolved despite the fact that perfect competition has been achieved? Explain in each case why the problem is important and why perfect competition does not solve it, or explain why there are no unsolved problems.

III. (40 points)

Some prominent manufacturers such as Sunbeam, Eastman Kodak, and Bayer Aspirin, set minimum prices below which retailers may not resell their products. In most states an agreement to this effect between a manufacturer and some retailers is legally enforceable on all retailers.

(a) What is the probable effect of this practice on the net rate of return on factors of production used in retailing?

(b) What is the probable effect of this practice on the net profits of the manufacturers concerned?

Explain your answers fully.

Source: Harvard University Archives. Papers of Zvi Griliches. Box 129. Folder “Preliminary Examinations, 1955-1957”.

Image Source: University of Chicago Photographic Archive, Zvi Griliches portrait (undated), apf1-06565, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.

Categories
Chicago Exam Questions

Chicago. Economic Theory Preliminary Examination. Griliches Copy. Winter, 1957

There is something of a mystery about the following transcription of the “Economic Theory I” Preliminary Examination for the Ph.D. and A.M. Degrees at the University of Chicago from the Winter quarter of 1957 that I found in the Zvi Griliches papers at the Harvard University archives. It does not match the Economic Theory I preliminary examination from the same Winter Quarter found in the Milton Friedman papers at the Hoover Institution archives. The most likely explanation is that some anonymous soul simply failed to have updated the quarter of the exam in a copy-and-paste rough draft.. The mystery then, is which came first, the Friedman copy or the Griliches copy?

_________________________

Previously transcribed and posted Preliminary and Field Exams from the economics graduate program of the University of Chicago

_________________________

ECONOMIC THEORY I
Preliminary Examination for the Ph.D. and A.M. Degrees

Winter Quarter 1957

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

Your Code Number and NOT your name
Name of Examination
Date of Examination

Results of the Examination will be sent to you by letter after results on all preliminary examinations have been received.

Answer all questions: Time: Four hours.

Do section I of the examination on this paper and turn it in to the proctor with the rest of your examination. You are to do sections II-VII separately.

  1. Indicate whether each of the following statements is true (T), false (F), or uncertain (U). Explain briefly the basis for your answer.
    1. A tax on a product whose supply is of zero elasticity will have no effect on resource allocation.
    2. If factors of production are used in absolutely fixed proportion in the production of a particular product, the demand for each of the factors by the producers of the product will be completely inelastic with respect to price.
    3. Since 1951 interest rates have risen by about 50 percent whereas real wages have risen only by approximately 24 percent. This implies that firms are and will be using more labor per unit of capital than they did in 1950.
    4. An income tax has no resource misallocating effects.
    5. A competitive firm will increase its demand for factor A as a result of a fall in the price of factor B.
    6. “A monopolist has no supply curve.” Hence it is impossible to predict his response to a shift in the demand curve facing him.
    7. Budget studies have yielded an income elasticity of demand for food of .5 for urban families and of . 35 for farm families. This implies that farm families have substantially different tastes or consumption habits.
    8. Price stabilization at the mean of fluctuating prices would harm consumers.
    9. Product A is one of the major inputs used in the production of product B. Price control is imposed on product A, but not on product B, at a level below the equilibrium price of A. This will result in a fall of the price of B.
    10. A tax of 50% of the gross sale price of all new automobiles in the U. S. will in the short run tend to double the market value of used automobiles, and in the long run tend to double the gross market price of new automobiles as well.
  2. Suppose the armed forces want to raise a fixed number of men. One way to do this would be to set a price at which the number of volunteers would equal the number wanted. Another way would be to set a lower price and draft the difference between the number wanted and the number volunteering. Assume that each person receiving a draft notice would be permitted not only to enter as a draftee but also either to buy a substitute or to be a substitute for someone else.
    Contrast the two schemes in terms of the personnel secured, the pay received, and the source of this pay.
  3. In a recent study, David Blank and George Stigler note the existence of an interrelation between the demand for higher education and the supply of faculty for institutions of higher education. “For”, they write, “the very presence of a much increased demand [for higher education] … carries with it a much increased supply of trained individuals” from whom faculty members can be recruited.
    1. What do you regard as the essential feature of the interrelation? Can you cite other examples? Contrast with specific examples where this particular interrelation does not arise.
    2. Suppose the increased demand for higher education led to no increase in the student body but was met entirely by severer rationing, by price or otherwise, of entry into college. Would the statement quoted above be rendered false?
      Justify your answer.
  4. Producers in one area of goods that are also produced elsewhere often claim that the distant producers keep their high quality product at home and sell only their low quality goods elsewhere. On the other hand, consumers often complain that local producers ship all their high quality products elsewhere and sell only the poor quality material locally (as in the standard California complaint that you can’t but a decent orange in retail markets in California). Obviously, either group might be right in some special case. But can you think of any general factors that would on the average tend to produce the one result or the other? I.e., in any particular case, what indirect information would you consider relevant in forming a judgment about which was right?
  5. We frequently speak of “the substitution of capital for labor”. What do you take this phrase to mean (a) for an individual firm; (b) for the economy as a whole? Does your interpretation allow for the fact that the major part of the cost of new capital equipment is labor cost?
  6. Indicate briefly the meaning of each of the following phrases, identify the economist (or economists) associated with each, and state his major contribution to economics:
    1. Pareto optimum
    2. Pigou effect
    3. Walrasian equilibrium
    4. Schumpeterian innovators
    5. Cobb-Douglas production function
    6. Conspicuous consumption
    7. Wicksellian natural rate of interest
    8. Contract curve
  7. Many families carry life insurance for the husband, and very few carry it for the wife or children. There have been several attempts to explain this. Some say that the loss from the death of the wife or children is mostly a psychic loss, and psych losses cannot be insured. Others say that the loss from the death of the wife or children is too small to be worth insuring. Evaluate these arguments. Can you give an explanation consistent with rational behavior?

Source: Harvard University Archives. Papers of Zvi Griliches. Box 129. Folder “Preliminary Examinations, 1955-1957”.

Categories
Chicago Economists UWash

Chicago. Economics Ph.D. alumnus. Shirley Jay Coon, 1926

The work for this post was begun under a wrong assumption. I thought that the Chicago economics Ph.D. (1926) Shirley J. Coon was a woman and I quite honestly expected to add another PhD trained woman economist to the alumnae list of Economics in the Rear-view Mirror. The portrait of Shirley J. Coon from the University of Washington yearbook from 1931 and the discovery that “J” stood for “Jay” forced me to update my Bayesian prior in the matter of Shirley’s identity.

The post turns out to be rather short as I have been unable to find many footprints left in the sands of time by Dean Shirley Jay Coon. A dissertation on the economic development of Missoula, Montana seems as inauspicious a topic as one could imagine, even for the German Historical School, so Coon’s academic obscurity comes as little surprise one century after his dissertation year at the University of Chicago.

_______________________

Shirley Jay Coon
Timeline

1887. Born 16 June in Walworth, Wisconsin.

1909. Beloit College undergraduate.

1915. M.A., Ohio State University

1915-19. Member of the department of economics and business administration at Ohio State.

Price expert for the Ohio food administrator during WWI

1919-1927. On the faculty of Montana State University.

1920-27. Dean of the Business School, Montana State University.

1925-26. Sabbatical to complete Ph.D. at Chicago.

1926. Ph.D. University of Chicago. “Economic Development of Missoula, Montana,” unpublished doctoral dissertation.

1927-1938. Professor of Economics at the University of Washington.

1931-38. Dean of the college of economics and business at University of Washington.

1938. Resigned due to ill health.

1938. Died 4 October in Seattle, Washington.

Sources: Obituary in The Daily Missoulian (Missoula, Montana) · Oct 5, 1938 and University of Washington yearbooks.

Image Source: University of Washington yearbook TYEE 1931, p. 38.

Categories
Chicago Exam Questions Microeconomics

Chicago. Price Theory Core Examination. Summer 1961

 

Another gap just filled in a quarter century of University of Chicago graduate qualifying exams in price theory.

___________________

Chicago Price Theory
Preliminary/Core Exams
Previously Posted

Summer 1949
Summer 1951
Summer 1952
Winter 1955
Summer 1955
Winter 1957
Winter 1958
Summer 1960
Winter 1961
Summer 1962
Winter 1963
Winter 1964
Winter 1965
Winter 1969
Summer 1975

___________________

ECONOMIC THEORY (Old Rules)
Summer 1961

Preliminary Examination for the Ph.D. and A.M. Degrees

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

Your Code Number and NOT your name
Name of Examination
Date of Examination

Results of the examination will be sent to you by letter.

Answer all questions. Time: 4 hours.

  1. Indicate whether statement is true, false, or uncertain, and briefly give your reason.
    1. A firm has a monopoly in its home market and also sells in a perfectly competitive world market; if its home-market price is 50% above the world market price, the elasticity of demand in the home market must be 3.
    2. If a multiplant firm has to produce a given quantity of output, it will never pay it to produce in more than one of its plants if that plant has decreasing marginal costs.
    3. The development of more rapid urban transport will inevitably raise the aggregate rental value of urban residential property.
    4. If the number of acceptable applicants for admission to medical schools is less than the number that could be accepted, the medical profession cannot be raising its earnings by artificially restricting entry.
    5. The rate of interest is determined by the marginal productivity of capital.
    6. If a particular commodity is subject to a special tax not imposed on other commodities, removal of that tax will always increase economic welfare.
    7. If the supply curve of a competitive industry has a positive slope, it means that the industry is subject to decreasing returns to scale.
    8. If wage rates, on the average, increase at the same rate as average product per worker, this means that the marginal return on investment declines over time.
    9. Entrepreneurs in a competitive industry may realize short term gains or profit as a result of an increase in the price of an input (due to a shift in the supply function for the input), even if the demand curve for the industry remains unchanged.
  1. A. A drug manufacturer stated that the prices of drugs sold in England were priced at about one half the price of similar drugs in the United States. The reason given for the price difference was that per capita incomes were much lower in England than in the United States and the English could not afford to pay as much for the drugs.
    Accept the factual statements as valid. Discuss the statement in terms of:

    1. Demand functions for drugs in the two countries (income and price elasticities).
    2. Whether the manufacturer could be maximizing his profits.
    3. International trade restrictions on drugs in the two countries.
  1. B. In a given competitive industry, both price and output increase between two time periods. Indicate why each of the following statements is consistent or inconsistent with the observed changes in price and output or is simply irrelevant:
    1. The industry has a perfectly elastic supply curve.
    2. The demand curve has shifted to the right.
    3. The factor supply curves are upward sloping.
    4. The industry is subject to diminishing returns.
    5. Total revenue has increased because the price elasticity of demand is greater than unity.
    6. Rents and quasi-rents have increased.
  2. A. In the effect of union-produced wage increases on prices, one economist says,

“A competitive industry (with a horizontal long run supply curve] will eventually pass all of a wage increase on to consumers in higher product prices” but “a monopolized industry, if it maximizes profits both before and after the wage increase, will not pass on the full amount of the wage increase in prices.”

Assume that the monopolized industry, like the competitive, operates under long-run constant costs.

    1. Explain precisely what “pass all of a wage increase on to consumers in higher prices” means.
    2. Is the statement for the monopolized industry correct? If so, prove it. If not, state why not and indicate any additional conditions required to make it true.
  1. B. This economist also says that the competitive industry “will regain its normal rate of profit”, whereas, in the monopolized industry, “the wage increase will lower monopoly profits”
    1. What does the word “profit” mean in these statements? in the phrase “maximizes profits” of the preceding question?
    2. Do the two statements imply a difference in results in the sense that the monopolized industry will not regain “its normal rate of profit”?
    3. Indicate briefly what other meaning or meanings, if any, does the term “profit” have in economic theory.
  2. Discuss the relation between forward (and/or futures) prices and spot prices on commodity markets and foreign exchange markets and the role of “speculators” and “hedgers” in these markets. State some of the leading theories about this relationship and discuss the kinds of evidence used in testing them.

Source: Harvard University Archives. Papers of Zvi Griliches. Box 129. Folder “Preliminary Examinations, 1957-1965”.