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Economic History Exam Questions Harvard Suggested Reading Syllabus

Harvard. Reading list and final exam for U.S. economic and financial history. Taussig and Gay, 1905-1906

Assistant Professor Oliver Mitchell Wentworth Sprague taught the Harvard course “Economic History of the United States”/ “Economic and Financial History of the United States” in 1901-02 (with James Horace Patten), 1902-03, 1903-04, and 1904-05. The course was taken over in 1905-06 by Frank William Taussig and Edwin Francis Gay after Sprague left for a full professorship at the Imperial University of Japan.

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Course Enrollment
1905-06

Economics 6 2hf. Professor Taussig and Asst. Professor Gay. — Economic and Financial History of the United States.

Total 79: 14 Graduates, 15 Seniors, 37 Juniors, 10 Sophomores, 3 Others.

Source: Harvard University. Report of the President of Harvard College, 1905-1906, p. 72.

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READING FOR ECONOMICS 6
(1905-6)

Prescribed reading is indicated by an asterisk (*).

1. COLONIAL PERIOD.

*Ashley, Commercial Legislation of England and the American Colonies, Q.J.E., Vol. XIV, pp. 1-30; printed also in Surveys, pp. 309-335.

Schmoller, Mercantile System, pp. 57-80.

Beer, Commercial Policy of England, pp. 1-158.

Rabbeno, American Commercial Policy, pp. 3-91.

Eggleston, Agriculture and Commerce in the Colonies, The Century Magazine, Jan. and June, 1884, Vol. V, pp. 431-449; Vol. VI, pp. 234-256.

2. COMMERCE AND MANUFACTURES, 1776-1815.

*Hill, First Stages of the Tariff Policy of the United States, Amer Econ. Assn. Pub., Vol. VIII, pp. 107-132.

Pitkin, Statistical View of the United States, ed. 1835, ch. ix, pp. 368-412.

Rabbeno, American Commercial Policy, pp. 287-324, 95-145.

Hamilton, Report on Manufactures, in Taussig’s State Papers and Speeches on the Tariff, pp. 1-108.

3. REVOLUTIONARY AND NATIONAL FINANCE – WESTWARD MOVEMENT, 1776-1815.

*Dewey, Financial History of the United States, chs. ii-vi, pp. 33-141.

Bullock, Essays on the Monetary History of the United States, pp. 60-78.

Hamilton, Reports on Public Credit, Amer. State Papers, Finance, Vol. 1, pp. 15-37, 64-67.

Turner, Significance of the Frontier in American History, in Report of Amer. Hist. Assn., 1893, pp. 199-227.

Semple, American History and its Geographical Conditions, chs. iv, v, pp. 52-92.

4. FINANCE AND BANKING, 1815-1860.

*Dewey, Financial History, pp. 223-237, 252-262.

Sumner, Andrew Jackson, ed. 1886, pp. 224-249, 257-276, 291-342.

Catterall, The Second Bank of the United States, chs. xvi-vviii, pp. 376-403, 430-452.

Conant, History of Modern Banks of Issue, ch. xiv, pp. 310-347.

White, Money and Banking, chs. ix-xii, pp. 324-361.

5. TARIFFS AND MANUFACTURES, 1815-1860.

*Taussig, Tariff History, pp. 1-154.

Taussig, State Papers and Speeches on the Tariff, pp. 108-385.

Rabbeno, American Commercial Policy, 146-199, 325-383.

6. INTERNAL IMPROVEMENTS, 1815-1860.

*Callender, Early Transportation and Banking Enterprises, Q.J.E., Vol. XVII, pp. 111-162.

Chevalier, Society, Manners, and Politics in the United States, chs. vii, xx, xxi, pp. 80-87, 209-276.

Pitkin, Statistical View (1835), Vol. XII, pp. 531-581.

Gallatin, Plan of Internal Improvements, Amer. State Papers, Misc., Vol. I.

Tanner, Railways and Canals of the United States. See, especially, the map.

7. LAND POLICY AND AGRICULTURE, 1815-1860.

*Hart, Practical Essays on American Government, pp. 233-257.

*Hammond, Cotton Industry, ch. iii, pp. 67-119.

Donaldson, Public Domain.

Sato, History of the Land Question in the United States, Johns Hopkins University Studies, 4th series, nos. 7-9, pp. 127-181.

8. POPULATION AND SLAVERY, 1815-1860.

*Cairnes, Slave Power, chs. ii, iii, v, pp. 34-93, 120-150.

Hammond, Cotton Industry, ch. ii, pp. 34-60.

Semple, American History and its Geographic Conditions, ch. ix, pp. 150-177.

9. FINANCE, BANKING, AND CURRENCY PROBLEMS, 1860-1900.

*Dewey, Financial History, chs. xii, xiii, xx, pp. 271-330, 463-473.

*Noyes, Thirty Years of American Finance, chs. i, ii, iii, x, pp. 1-72, 234-254.

Taussig, Silver Situation, pp. 1-157.

Dunbar, National Banking System, Q.J.E., Vol. XII, pp. 1-36.

10. TRANSPORTATION; TARIFF.

*Taussig, Tariff History, pp. 155-230.

Industrial Commission, Vol. XIX, pp. 466-481.

Johnson, American Railway Transportation, chs. ii, ii, v, pp. 13-38, 52-68.

Taussig, Contribution to the Theory of Railway Rates, Q.J.E., Vol. V, pp. 438-465.

Hadley, Railroad Transportation, pp. 24-56.

11. INDUSTRIAL EXPANSION AND TARIFF.

*Taussig, Tariff History, pp. 230-409.

Stanwood, American Tariff Controversies, Vol. II, pp. 243-394.

Taussig, Iron Industry, Q.J.E., Vol. XIV, pp. 143-170, 475-508.

Industrial Commission, Vol. XIX, pp. 485-519, 544-569.

Twelfth United States Census, Vol. IX, pp. 1-16; Vol. X, pp. 723-743.

Taussig, Wool and Woolens, Q.J.E., Vol. VIII, pp. 1-39.

Wright, Wool-growing and the Tariff since 1890, Q.J.E., Vol. XIX, pp. 610-647.

Willoughby, Integration of Industry in the United States, Q.J.E., Vol. XVI, pp. 94-115.

12. AGRICULTURE AND OPENING OF THE FAR WEST.

*Industrial Commission, XIX, pp. 43-123, 134-168.

Hammond, Cotton Industry, Book I, chs. iv-vii, ix, pp. 120-228, 324-356.

Adams, The Granger Movement, North American Review, Vol. CLXXV, pp. 394-424.

13. COMMERCE AND SHIPPING.

*Meeker, Shipping Subsidies, Pol. Sci. Qr., Vol. XX, pp. 594-611.

*Noyes, Recent Economic History of the United States, Q.J.E., Vol. XIX, pp. 167-209.

Wells, Our Merchant Marine, chs. i-v, pp. 1-94.

14. WAGES AND THE LABOR PROBLEM.

*Levasseur, American Workman, pp. 436-509.

Mitchell, Organized Labor.

Industrial Conciliation, National Civic Federation.

Wright, Industrial History of the United States, Part III, pp. 231-322.

15. IMMIGRATION AND THE RACE QUESTION.

*Mayo-Smith, Emigration and Immigration, chs. iii, iv, pp. 33-78.

Tillinghast, Negro in Africa and America, pp. 102-227.

Hoffman, Race Traits and Tendencies of the American Negro, pp. 141-148, 170-176, 310-329.

Washington, Future of the American Negro, pp. 3-244.

Mayo-Smith, Emigration and Immigration, pp. 79-167, 227-283.

Walker, Discussions in Economics and Statistics, Vol. II, pp. 417-434.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in conomics, 1895-2003, Box 1, Folder “Economics, 1905-1906”.

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ECONOMICS 6
Year-end Examination, 1905-06

  1. Describe the history of the agitation for “cheap money” in the United States; the forms assumed both before and after 1860, its causes and the probability of its recurrence.
  2. Compare critically the financing of the Revolutionary War, the Civil War, and the Spanish War.
  3. (a) Summarize the principal features of our tariff legislation from the close of the Civil War to the Dingley Tariff.
    (b) What has been the effect of the tariffs on the iron and steel industry?
  4. Give the history of the Union Pacific Railroad and its relations to the government.
  5. Account for the changes in the character of the foreign trade of the United States in respect to the excess of imports or of exports.
    Take one of the following questions:
  6. Discuss the significance and causes of the increase of farm tenancy and the rural exodus.
  7. What can you say as to agricultural conditions in the South before and since the Civil War? What about the negro problem?

Source: Harvard University Archives. Harvard University, Examination Papers 1873-1915. Box 8, Bound volume: Examination Papers, 1906-07; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1906), pp. 31-32.

Image Source: Portraits of Frank William Taussig and Edwin Francis Gay from the Harvard Class Album 1906.

 

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Exam Questions Harvard Transportation

Harvard. Final examination for transportation economics. Ripley, 1905-1906

William Zebina Ripley

Relatively early on transportation economics was recognised as one of the major specialisation fields within applied economics. This can be illustrated with the courses offered by William Zebina Ripley at Harvard that were introduced during the first decade of the twentieth century. Ripley also covered labor relations as well as industrial organisation and regulation. This was still a time when economics faculty members were expected to span several special fields. As Adam Smith had said, “The division of labour is limited by the extent of the market.” The era of the “Universalgenie” [Narrator’s voice: “They only thought they were.”] had not yet been replaced by the era of the “Fachidiot” [The narrator continues, “…ahem, present company excluded”].

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Earlier exams etc. for Economics 5

1900-01 (Hugo Richard Meyer alone)
1901-02 (Ripley with Hugo Richard Meyer)
1903-04 (Ripley alone)
1904-05 (Ripley with Stuart Daggett)

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Course Enrollment
1905-06

Economics 5 1hf. Professor [William Zebina] Ripley, assisted by Mr. [Stuart] Daggett. — Economics of Transportation.

Total 138: 10 Graduates, 32 Seniors, 59 Juniors, 28 Sophomores, 9 Others.

Source: Harvard University. Report of the President of Harvard College, 1905-1906, p. 72.

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ECONOMICS 5
Final Examination
1905-06

  1. What is the present legal status of the “Long and Short Haul” clause of the Act to Regulate Commerce? Outline the decisions clearly.
  2. The average length of haul on the St. Paul road is about 185 miles; while on the Union Pacific it is about 386 miles. How would these conditions affect the revenue per ton mile?
  3. What advantages might follow the repeal of the prohibition of pooling, from a railway point of view?
  4. What authority has the Interstate Commerce Commission concerning witnesses and the production of papers? What is the latest decision?
  5. Should the following items of expenditure be charged to capital, improvement, or operating expense account, viz.: (1) cost of abolishing grade crossings; (2) replacement of light rails with heavy ones; and (3) premium on purchase of stock in a subsidiary road? Give your own reasons for whichever course you advocate.
  6. What is the present method of control of the anthracite coal roads?
  7. What are the main inducements for stock watering, as described by Johnson?
  8. What is the nature of the principal bills now before Congress, amending the Act to Regulate Commerce? Describe them separately.

Source:  Harvard University, Examination Papers 1873-1915. Box 7, Bound volume: Examination Papers, 1905-06;  Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College(June, 1906), p. 31.

Image Source: Harvard University Archives.  William Zebina Ripley [photographic portrait, ca. 1910], J. E. Purdy & Co., J. E. P. & C. (1910). Colorized by Economics in the Rear-view Mirror.

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Exam Questions Harvard Sociology

Harvard. Final exam questions for principles of sociology. Carver, 1905-1906

Thomas Nixon Carver

 

Excerpts from Thomas Nixon Carvers’s autobiography dealing with sociology, his course reading list and a “thick” course description from the 1904-05 academic year have been transcribed and posted earlier.

Image today having a question like “What are the chief factors tending to promote the improvement of the race, and what are the chief factors tending to deteriorate it?” standing between you and your final grade in a course.

I wonder when such a question was first able to elicit a consensus cringe among social scientists. 

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Course Enrollment

Economics 3. Professor Carver. — Principles of Sociology. Theories of Social Progress.

Total 60: 9 Graduates, 11 Seniors, 23 Juniors, 13 Sophomores, 4 Others.

Source: Harvard University. Report of the President of Harvard College, 1905-1906, p. 72.

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HARVARD UNIVERSITY
ECONOMICS 3
Mid-year Examination, 1905-06

  1. State and explain briefly, —
    1. Spencer’s position as to the possibility of a science of society.
    2. Bagehot’s conclusion as to verifiable progress.
    3. Kidd’s theory as to the function of religious beliefs in the development of society.
    4. Kidd’s prediction as to the future relation of European races to tropical regions.
  2. What are the chief factors tending to promote the improvement of the race, and what are the chief factors tending to deteriorate it?
  3. Discuss briefly the following topics in their relation to social development:
    1. “The consciousness of kind.”
    2. Imitation
    3. Resentment.
    4. The power of idealization.

Source: Harvard University Archives. Harvard University. Mid-year Examinations, 1852-1943. Box 7, Bound Volume: Examination Papers, Mid-Years 1905-06.

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ECONOMICS 3
Year-end Examination, 1905-06

  1. Discuss Kidd’s view that the real drift of society is toward greater equality and that this is accompanied by keener competition.
  2. Can social progress be defined in terms of human well being? Explain.
  3. What is meant by the transition from a pain to a pleasure economy? What corresponding transition does Comte describe?
  4. If we grant that war is primarily due to economic reasons, does the conclusion follow that it is permanent?
  5. What importance attaches to the prolongation of infancy in the human species?
  6. Compare the views of Kidd and Buckle as to the relative importance of the moral and the intellectual factors in social development.
  7. What is meant by the storing of social energy, and what are some of the chief agencies by which it is accomplished?
  8. Compare the prince, as described by Machiavelli, with the modern political boss.
  9. What is meant by the distinction between the repressive and the directive activities of the State? What are the main conditions which justify the latter?
  10. What general principle determines the obligation of the State in the imposition of taxes?

Source: Harvard University Archives. Harvard University, Examination Papers 1873-1915. Box 8, Bound volume: Examination Papers, 1906-07; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1906), p. 30.

Image Source: Portrait of Thomas Nixon Carver, colorized by Economics in the Rear-view Mirror, from the Harvard Class Album 1906.

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Exam Questions Harvard Principles

Harvard. Principles of Economics Exam. Taussig et al., 1905-1906

Over the next couple of weeks Economics in the Rear-view Mirror will be posting the printed economics course exams from Harvard for the academic year 1905-06.  Economics in the Rear-View Mirror has already transcribed and posted nearly every economics exam at Harvard University up to this year. You will find links to them in the Catalogue of Artifacts, then use page search for, e.g.,”Exam” to be awed if not shocked by the sheer quantity of material available to you.

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Course Enrollment

Economics 1. Professor [Frank William] Taussig and Asst. Professor [Abram Piatt] Andrew, assisted by Messrs. [Silas Wilder] Howland, [Chester Whitney] Wright, [Seldon Osgood] Martin, [William Hyde] Price, [Frank Richardson] Mason, and [Stuart] Daggett. — Principles of Economics.

Total 470: 1 Graduate, 9 Seniors, 87 Juniors, 266 Sophomores, 63 Freshmen, 44 Others.

Source: Harvard University. Report of the President of Harvard College, 1905-1906, p. 72.

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ECONOMICS 1
Mid-year Examination, 1905-06

Arrange your answers strictly in the order of the questions.
Answer nine questions, five from Group I, four from Group II.

Group I

  1. Which of the following would you class as capital:—
    1. stocks of goods in retailers’ hands;
    2. a theatre:
    3. the skill, acquired through training and education, of highly efficient workmen;
    4. agricultural land permanently improved by drainage, embankments and the like.
  2. Explain concisely,
    1. the law of diminishing returns;
    2. intensive and extensive margin of cultivation;
    3. marginal utility.
  3. Suppose all agricultural land to be equally fertile and equally distant from the market; suppose all to be under cultivation: would there be rent? If so, why and where? if not, why not?
  4. Explain in what way the value of monopolized commodities is influenced on the one hand by cost of production, on the other hand by marginal utility.
  5. Explain in what way the value of commodities produced at joint cost is influenced on the one hand by cost of production, on the other hand by marginal utility.
  6. State two different ways in which expense of education and training affects variations of wages in different occupations.

Group II

  1. “The extra gains which any producer or dealer obtains through superior talents for business, or superior business arrangements, are very much of a similar kind [to rent]. . . . All advantages, in fact, which one competitor has over another, whether natural or acquired, whether personal or the result of social arrangements, bring the commodity, so far, into the Third Class, and assimilate the possessor of the advantage to a receiver of rent.” —Mill.
    Explain what is the “third class” of commodities here referred to by Mill; wherein “personal” advantages differ from those which are “the result of social arrangements”; and how far the general doctrine set forth in this extract is found also in Walker and in Seager.
  2. State concisely the residual theory of distribution, as set forth by Walker.
  3. Suppose the number of laborers to increase greatly, the other factors in production (capital, land) remaining unchanged: what changes in wages would ensue, and in what manner would they be brought about, according to Mill? Walker? Seager?
  4. Explain concisely,
    1. the capitalization of rent;
    2. the capitalization of monopoly profits;
    3. the statement that the rate of interest determines the value of land and securities;
    4. innocent investors and acquired rights.
  5. A corporation organized to do a mercantile business buys an expensive city site, erects a building thereon, carries on the operations of buying and selling, and in due time distributes dividends among its stockholders. What is the nature of the return received by the stockholders?

Source: Harvard University Archives. Harvard University. Mid-year Examinations, 1852-1943. Box 7, Bound Volume: Examination Papers, Mid-Years 1905-06.

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ECONOMICS 1
Year-end Examination, 1905-06

Omit one question from each group.

I.

  1. Define capital, and mention two articles of wealth which are always capital, two which never are, and two which sometimes are and sometimes are not.
  2. Under what conditions would there be no economic rent?
  3. Explain briefly the salient influences which will determine the value (1) at any given moment, (2) in the long run, of the following:
    1. an uncopyrighted book,
    2. a copyrighted book,
    3. an ounce of gold.
  4. What are the limits to the price-fixing and profit-earning powers of monopolies? Are there any other conditions which will tend to check the indefinite growth of combinations?

II.

  1. Is it true of all commodities that changes in supply affect their value proportionally? Is it true of the commodity money? If in your opinion there is any difference, explain it.
  2. Can a commodity change its value without changing its price? Can it change its price without changing its value? Suppose the commodity were gold bullion, would your answer vary?
  3. Suppose an increase in the volume of our currency, due to a new issue of silver, what would be the effect upon international trade? Would this effect be lasting? Would your answer depend at all upon the condition of our currency at the time the increase occurred?
  4. If the merchandise imports from England to the United States equalled the exports from the United States to England (a) what would be the state of exchange on London? (b) Would there be any greater advantage to either of the countries engaged in trade?

III.

  1. Would a tariff “for revenue only” differ from a protective tariff, the product of which is entirely devoted to revenue? Has either any advantage over the other?
  2. “A man is of all sorts of luggage the most difficult to be transported.” What is the bearing of this fact upon the theory of international trade?
  3. (a) How are loans affected when the reserve limit (as established either by law or custom) is reached in England, Germany, and in the United States?
    (b) Show whether a system of “combined reserves” is needed in France, England, or Germany.
  4. Arrange the following items in their proper order as they would appear in the statement of a national bank. What criticisms would a bank examiner make? Would these criticisms vary if the bank were situated in New York, Boston, or the town of Lexington?
Loans,

360 thousands of dollars
Capital,

50      “                “       “
Reserve,

50      “                “       “
Real estate,

28      “                “       “
Deposits,

300    “                “       “
Undivided profits,

3        “                “       “
Notes,

115    “                “       “
Other assets,

20      “                “       “
Bonds and stocks,

40      “                “       “
Surplus,

30      “                “       “

Source: Harvard University Archives. Harvard University, Examination Papers 1873-1915. Box 8, Bound volume: Examination Papers, 1906-07;  Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1906), pp. 26-27.

Image Source: Portrait of Professor Frank W. Taussig in the Harvard Class Album 1906.

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Exam Questions Harvard International Economics Suggested Reading

Harvard. Undergraduate International Economics. Book list and final exam. Caves, 1963-1964

Harvard Square in February 1964

While the memo to the libraries promises a full reading list for the course on international trade and finance to come as soon as possible, there was no copy of Richard Caves’ full reading list for the first semester of 1963-64 to be found with other economics course syllabi in the Harvard archives. Still the twenty items arranged in approximate order of use together with the final exam questions for the course give us a good idea of the course content.

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Course Announcement

Economics 148. International Trade: Basic Facts and Policies

Half course (fall term). Tu., Th., (S.), at 12. Professor Caves

Treats such problems as the balance of payments, the dollar market, capital movements, exchange rates, exchange control, European integration and the relation of domestic and international policies.

Source: Harvard University. Faculty of Arts and Science. Courses of Instruction for Harvard and Radcliffe. Official Register of Harvard University, Vol. LX, No. 21 (September 4, 1963) p. 104.

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Book list for Economics 148

September 11, 1963

To: Lamont, Radcliffe, Littauer Libraries
From: Richard E. Caves
Subject: book list for Economics 148, Fall Semester, 1963-64

The following books and other special materials which I plan to assign for Economics 148 (“International Trade: Basic Facts and Policies”) are arranged in the approximate order of use during the term. Heavy assignments will be made in those titles preceded by an asterisk; in general, only relatively short passages will be assigned from other titles.

Students will be urged to purchase as a basic text Charles P. Kindleberger, International Economics, 3rd ed. (Homewood, Ill.: Richard 3 D. Irwin, 1963). I expect an enrollment in the course about the same as last year, 90 to 100.

A full reading list will follow as soon as possible.

Lary, Hal B. Problems of the United States as World Trader and Banker. New York: National Bureau of Economic Research, 1963.

Allen, W. R., and Allen, C. L., eds. Foreign Trade and Finance: Essays in International Economic Equilibrium and Adjustment. New York: Macmillan, 1959.

Meier, Gerald M. International Trade and Development. New York: Harper and Row, 1963.

Kenen, Peter B. Giant Among Nations: Problems in United States Foreign Economic Policy. Chicago: Rand, McNally, 1963.

Daedalus, Summer and Fall numbers, 1962.

Vaccara, Beatrice N. Employment and Output in Protected Manufacturing Industries. Washington, D.C.: Brookings Institution, 1960.

Myrdal, Gunnar. An International Economy: Problems and Prospects. New York: Harper & Bros., 1956.

Triffin, Robert. Europe and the Money Muddle. New Haven: Yale University Press, 1957.

*Salant, Walter S. et al. The United States Balance of Payments in 1968, Washington, D.C. Brookings Institution, 1963.
[Note: Chapters 2-9 were the Reading Period assignments]

Harris, Seymour E., ed. The Dollar in Crisis. New York: Harcourt, Brace & World, 1961.

*Factors Affecting the United States Balance of Payments, Compilation of Studies, U.S. Congress, Joint Economic Committee, Subcommittee on International Exchange and Payments, 87th Congress, 2nd session. Washington, D. C.: Government Printing Office, 1962.

Tew, Brian. International Monetary Cooperation, 1945-1956. London: Hutchinson’s University Library, 1956.

Tew, Brian, The International Monetary Fund: Its Present Role and Future Prospects. Essays in International Finance, No. 36. Princeton, N.J.: International Finance Section, Princeton University, 1961.

Machlup, Fritz. Plans for Reform of the International Monetary System, Special Papers in International Economics, No. 3. Princeton, N.J.: International Finance Section, Princeton University, 1962.

Tinbergen, Jan. Shaping the World Economy: Suggestions for an International Economic Policy. New York: Twentieth Century Fund, 1962.

Asher, Robert E. Grants, Loans, and Local Currencies: Their Role In Foreign Aid. Washington, D. C.: Brookings Institution, 1961.

Millikan, M. F., and W. W. Rostow. A Proposal: Key To An Effective Foreign Policy. New York: Harper & Bros., 1957.

Mikesell, R. F. Promoting United States Private Investment Abroad. Washington, D.C. National Planning Association, 1957.

*Balassa, Bela. The Theory of Economic Integration. Homewood, Ill.: Richard D. Irwin, 1961.

Sannwald, Rolf F., and Jacques Stohler. Economic Integration: Theoretical Assumptions and Consequences of European Integration. Princeton, Princeton University Press, 1959.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. Box 8, Folder “Economics, 1963-1964”.

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HARVARD UNIVERSITY
Department of Economics

Economics 148
Final Examination
January 21, 1964

Answer question No. 1 and three of the remaining five. The answers to all questions will be weighted equally.

  1. Describe the basic model used in the Brookings report (The United States Balance of Payments in 1968) to forecast the balance of payments and evaluate its completeness and correctness in terms of international trade theory.
    (Note: Make sure that you distinguish between the structure of the model and the assumptions made about independent variables used in the model.)
  2. Do underdeveloped countries face a conflict between the “gains from trade” and the “gains from growth”?
    Discuss critically the arguments which have been advanced for the restriction of imports by developing countries, distinguishing between arguments for across-the-board restrictions and those for restricting the inflow of particular types of commodities.
  3. A country devalues its currency. Show how the price and income adjustment mechanisms respond to affect the balance of payments. Would you normally expect the balance to improve? Is it possible for no net improvement to occur, although the price effect is favorable?
  4. Discuss the elements of the “international liquidity problem.” Would the problem disappear if the United States balance of payments (miraculously) returned to equilibrium? Appraise the extent to which at least two of the proposals for dealing with the liquidity problem would solve the essential elements of that problem, as you see them.
  5. A country forms a customs union with another. Illustrate the following effects for any one traded commodity, using diagrams, and assuming that the world’s and the partner country’s supply functions are perfectly elastic, while the domestic supply and demand functions are neither perfectly elastic nor perfectly inelastic:
    1. Tariff revenue foregone
    2. Transfer from the government to the consumers
    3. Transfer from domestic producers to consumers
    4. Change in consumers’ surplus
    5. Trade creation
    6. Trade diversion
      Briefly, how might the net effect (gain or loss) of the union on the country’s welfare be measured?
  6. Can industrialized countries increase their rates of economic growth by forming customs unions? Appraise the possible gains from faster growth in the setting of Western European economies. Could some of the effects of a customs union hamper growth, either among members or in excluded countries?

Source: Harvard University Archives. Social Sciences. Final Examinations January 1964 (HUC 7000.28, vol. 150).

Image Source: Harvard Square Snowstorm, February 1964. Boston Public Library, Boston Herald-Traveler Photo Morgue Collection. Copy downloaded from the Digital Commonwealth website.

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Agricultural Economics Exam Questions Fields Harvard History of Economics Industrial Organization Money and Banking Public Finance Sociology Theory Undergraduate

Harvard. Division Exams for A.B., General and Economics, 1921

The Harvard Economics department was once one of three in its Division in the Faculty of Arts and Sciences. The Departments of History and Government shared a general division exam with the Department of Economics and also contributed their own specific exams for their respective departmental fields. This post provides the questions for the common, i.e. general, divisional exam, the general economics exam, and all the specific exams at the end of the academic year 1920-21 for those fields falling within the perview of the economics department.

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Previously posted
Division A.B. Exams

Division Exams 1916
Division Exams, January 1917
Division Exams, April 1918
Division Exams, May 1919
Division Exams, April/May 1920

Division Exams 1931

Special Exam for Money and Government Finance, 1939
Special Exam Economic History Since 1750, 1939
Special Exam for Economic Theory, 1939
Special Exam for Labor and Social Reform, 1939

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DIVISION OF HISTORY, GOVERNMENT AND ECONOMICS

EXAMINATIONS FOR THE DEGREE OF A.B.
1920-21

DIVISION GENERAL EXAMINATION

PART I

The treatment of one of the following questions will be regarded as equivalent to one-half of this examination and should therefore occupy one hour. Write on one question only. Insert before your answer to this question a sketch of your plan of treatment.

  1. Discuss the relations of civilization to climate.
  2. Does history show that the periods of a nation’s political and literary greatness tend to coincide?
  3. Was America’s entrance into the World War a consequence or a violation of her policies and traditions?
  4. Discuss the following: “One of the great difficulties, as well as one of the great fascinations of history is the constantly changing point of view; but we should beware of interpreting the past in the light of the present.”
  5. What have been and what should be the limitations upon the application of the principle of self-determination in national relations?
  6. Contrast Roman provincial, and nineteenth-century colonial relations.
  7. What should be the limits of nationalization of essential industries?
  8. What have been the marked characteristics of three great states at the time of their greatest power?
  9. “Society has departed very widely from the strict rule of non-interference with industry by the State; indeed, the policy of non-interference was never carried out logically by any State.” Comment.
  10. Discuss: “The patriotism of nations ought to be selfish.”
  11. What are the standards of social justice?

PART II

The treatment of four of the following questions in Part II is required and will be regarded as equivalent to one-half of this examination, and should therefore occupy one hour. The four questions are to be taken from the Departments in which the student is NOT CONCENTRATING; two questions from each of the two Departments.

A. HISTORY

  1. Briefly characterize, with approximate dates, five of the following: Alexander, Aristotle, Augustus, Francis Bacon, Frederick Barbarossa, Bolivar, Calvin, Chatham, Franklin, Richelieu.
  2. Give a short account of the rise of the Christian Church down to the period of the Crusades.
  3. Estimate the importance of the Netherlands in the development of Europe.
  4. Discuss the relations of England and the United States during the past one hundred years.
  5. Write a brief historical account of slavery in the Western Hemisphere.

B. GOVERNMENT

  1. Discuss: “Not independence but interdependence is the hope of nations.”
  2. Explain the evolution and significance of trial by jury.
  3. What is the significance of the following headlines in March, 1921?
    1. “Austria in dangerous unrest.”
    2. “Briand voted confidence on reparations.”
    3. “Crown prince is plotting.”
    4. “Lenin knows his Italian friends.”
  4. What are the limits of uniform state legislation?
  5. What political unities can best control:
    1. police,
    2. water supply,
    3. roads?

C. ECONOMICS

  1. “The fundamental fact in history is the law of decreasing returns. It is the cause of the origin and development of civilization. . . . It is equally, and for the same reason, the source of poverty and war.”
    State, explain, and indicate the significance of the law of decreasing (diminishing) returns.
  2. What are the fundamental features of the organization of modern industrial society?
  3. Discuss one of the following statements:
    1. “Employees have the right to contract for their services in a collective capacity, but any contract that contains a stipulation that employment should be denied to men not parties to the contract is an invasion of the constitutional rights of the American workmen, is against public policy, and is in violation of the conspiracy laws.”
    2. “In the old days, America outsailed the world. . . . I want to acclaim the day when America is the most eminent of shipping nations. . . . A big navy and a big mercantile marine are necessary to the future of the country.”
  4. Why should there be a labor party in England and not in the United States?
  5. What are the economic essentials of socialism?

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GENERAL EXAMINATION
DEPARTMENT OF ECONOMICS

I

The treatment of two of the following questions will be regarded as equivalent to one-half of the examination and should therefore occupy one hour. Write on two questions only.

  1. Give the author, approximate date, and general character of five of the following works:
    1. National System of Political Economy.
    2. Essays in Political Arithmetick.
    3. England’s Treasure by Forraign Trade.
    4. Essay on the Principle of Population
    5. Principles of Political Economy.
    6. The Wealth of Nations.
    7. Das Kapital.
    8. Lombard Street.
    9. Capital and Interest.
  2. Explain four of the following terms:
    Abstinence; Manchester School; stationary state; iron law of wages; produit net; non-competing groups; Scholasticism; Utilitarianism.
  3. Locate on an outline map:
    1. The world’s principal sources of five of the following raw materials: cotton; copper; sugar; silk; wheat; tin; rice; nitrate; petroleum; gold.
    2. The more important routes of overseas transportation.
    3. The world’s chief regions of manufacture.

II

The treatment of three of the following questions will be regarded as equivalent to one-half of the examination and should therefore occupy one hour. Write on three questions only. Be concise.

  1. Define “thrift” and discuss its social significance.
  2. Analyze the determination of normal value under competitive conditions of joint cost.
  3. What is meant by “monetary inflation”? How is it to be measured and what is its importance?
  4. What has been the course of the interest rate in modern times? What probably will be the course of the rate during the next few years? Why?
  5. What are the purposes and limits of progressive taxation?
  6. Discuss the future of public utilities in the United States.
  7. To what extent and in what respects, if at all, is labor legislation of the times a corrective of the more serious defects of the existing social order?
  8. Discuss: “Perpetual prosperity would be a national calamity.”

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SPECIAL EXAMINATION
ECONOMIC THEORY

Answer six questions

A

Take from this group at least two and not more than four

  1. What is the concept of “justice” in the theory of the distribution of wealth?
  2. Comment on the validity and significance of the following contention: “Labor is the source of all wealth.”
  3. “Whether capital is productive depends simply on the question: Are tools useful? It matters not how much or how little tools add to the product — if they add something, capital is productive.” Do you agree? Explain.
  4. “The forces which make for Increasing Return are not of the same order as those that make for Diminishing Return. . . . The two ‘laws’ are in no sense coordinate. . . . The two ‘laws’ hold united, not divided, sway over industry.” Comment critically.
  5. What relations exist between the accounting and economic concepts of “cost of production”?
  6. “The differences in the productive powers of men due to their heredity or social position give to certain individuals the same kind of an advantage over others that the owner of a corner lot in the center of a city has over one in the suburbs. If the income from a corner lot is a surplus and can therefore be described as unearned, the income of a man of better heredity, education or opportunity must also be regarded as a surplus income and therefore unearned.”
    Discuss this statement with reference to your general theory of distribution.

B

Take from this group at least one and not more than wto

  1. Give a brief historical account of the theory of population.
  2. Trace the development of the theory of international trade.
  3. In what ways have the following influenced the history of economic thought: Aristotle, Thomas Aquinas, Malthus, Ricardo, J.S. Mill, Marx?
  4. Outline the evolution of the theory of economic rent.

C

Take from this group at least one and not more than two

  1. “The profits of speculation on the Stock Exchange are just as unearned as the increment in the value of urban building sites; unlike the profits of speculation in produce, they represent no service to society.” Do you agree? Why, or why not?
  2. “There is a point beyond which advertising outlay is extravagant.” Explain.
  3. “I do not see how we can retain our home markets, upon which American good fortune must be founded, and at the same time maintain American standards of production and American standards of living unless we make other peoples with lower standards pay for the privilege of trading in the American markets.” Discuss.
  4. What are the advantages and disadvantages of the closed shop?

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DIVISION SPECIAL EXAMINATION
ECONOMIC HISTORY

Answer six questions 

A

Take from this group at least one and not more than two

  1. “The opening of the Erie Canal affected both intensive and extensive agriculture in the United States.” Explain. Have there been analogous changes in later periods?
  2. Discuss the following statement: “The enactment of corporation laws by the various states is the most important step made during the past century in the development of American manufactures.”
  3. Analyze the important economic after-effects of the World War.
  4. Briefly explain the most satisfactory methods for separating the different types of variation in time series.

B

Take from this group at least two and not more than four

  1. Write a brief account of one of the early English trading companies.
  2. Sketch the rise of the modern factory system.
  3. Compare changes in farm ownership and tenancy during the nineteenth century in England and the United States.
  4. Outline the history of banking in the United States from 1830 to 1860.
  5. Write a brief narrative of the early development of the railroad.
  6. Give the history of the Sherman Silver Purchase Act.
  7. Trace the evolution of the middle class and forecast its future.

C

Take from this group at least one and not more than two

  1. Give a critical account of the policy of the Federal Government in its regulation of industrial combinations.
  2. Discuss the history and consequences of immigration into the United States since 1840.
  3. Review the development of German foreign trade before the War with special reference to the methods of trade promotion.
  4. Analyze the causes, extent, and consequences of changes in the price level in the United States since 1914.

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DIVISION SPECIAL EXAMINATION
PUBLIC FINANCE

Answer six questions

A

Take from this group at least one and not more than two

  1. A law of 1691 authorizes the municipal corporations of New York “to impose any reasonable tax upon all houses within said city, in proportion to the benefit they shall receive thereby.” How far is this a correct principle of taxation and how far has it continued to be applied?
  2. Present a classification of Federal expenditures for a national budget system.
  3. Give a brief account of the financial statistics issued currently by the Federal Government.
  4. Discuss the proposal for the cancellation of all inter-allied debts.

B

Take from this group at least one and not more than two

  1. How has the Federal Constitution influenced national and state tax systems in the United States?
  2. Trace the history of an important fiscal monopoly.
  3. Give a brief account of the financial history of one of the American states.
  4. What connections have existed between currency systems and government finance? Illustrate fully.

C

Take from this group at least two and not more than four

  1. Compare the total expenditures in the United States in normal times for (a) national, (b) state, and (c) municipal purposes. What changes, if any, in the proportions are to be expected?
  2. To what extent is it desirable to separate state and local revenues in the United States?
  3. Indicate the nature and significance of the “grant in aid” in British public finance.
  4. What arguments have been used in European countries for and against a capital levy?
  5. Should the poll tax be abolished? Why, or why not?
  6. Discuss critically the present condition of the public debt of the United States.

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DIVISION SPECIAL EXAMINATION
MONEY AND BANKING

Answer six questions

A

Take from this group at least one and not more than two

  1. What part, if any, do commercial banks play in (a) the process of investment; (b) the increase of capital; (c) the course of industrial development; (d) leadership in the business world? In what respects, if at all, may the influence of commercial banks be economically inexpedient?
  2. Discuss the desirability of uniform bank accounting in the United States.
  3. Describe critically the more important sources of statistics of currency and credit in the United States.
  4. Analyze the successive phases of the business cycle. What are the causes of financial panics; industrial crises?

B

Take from this group at least one and not more than two

  1. Give a brief account of the life and work of John Law.
  2. Trace the history of usury laws.
  3. Outline the political background of American monetary history from 1870 to 1900.
  4. Give a brief history of the Reichsbank.

C

Take from this group at least two and not more than four

  1. “It is quite clear that the money question no longer survives as a political issue.” Do you agree? Why, or why not?
  2. To what extent has the status of the gold standard been affected by the World War?
  3. “This little neutral country [Switzerland], surrounded by four great continental belligerents, and bordering on the two principal battle-fronts of Europe, possesses at present, curiously enough, an exceptional purchasing power. This is the consequence of the high level of Swiss currency, which is 250 per cent above the usual parity with the currency of the neighbor in the east, Austria-Hungary; 100 per cent higher than that of the neighbor in the north, Germany; 90 per cent higher than that of the neighbor in the south, Italy; and 20 per cent higher than that of the western neighbor, France. Even in overseas countries, Swiss currency has a higher buying power than the English sovereign or the American dollar.” Explain fully.
  4. What changes have been made in the original Federal Reserve System? What have been the purposes and effects of the changes? What further changes, if any, seem desirable?
  5. Compare the provisions for agricultural credit in two important countries.
  6. Comment upon the following statement: “Prosperity continued through the war, and gave the nation such a tremendous start in business activity that we would still be rejoicing in a period of great prosperity had it not been for the death-dealing blow of deflation of credit given by Mr. Wilson’s Federal Reserve Board.”

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DIVISION SPECIAL EXAMINATION
CORPORATE ORGANIZATION, INCLUDING RAILROADS

Answer six questions

 A

Take from this group at least one and not more than two

  1. State the theory of value under conditions of monopoly. In what ways, if at all, is monopoly price affected by (a) cost of production per unit; (b) potential competition; (c) an elastic demand for the product; (d) the existence of satisfactory substitutes for the product; (e) hostile public opinion?
  2. Formulate a statistical classification of business organizations in the United States.
  3. Discuss the apportionment of railway operating expenses between freight and passenger service.
  4. Analyze the valuation of corporate assets from the standpoint of the principles of accounting.

B

Take from this group at least one and not more than two

  1. Compare the history of business corporations in England and the United States.
  2. Trace connections between railroad construction in the United States and related political and economic events.
  3. Give a brief narrative of the trust dissolutions of the Federal Government.
  4. What provisions of the Federal Constitution have been most important in determining policies of government regulation of public utilities?

C

Take from this group at least two and not more than four

  1. Discuss the following statement: “The enactment of corporation laws by the various states is the most important step made during the past century in the development of American manufactures.”
  2. What are the advantages and disadvantages of non-par stock?
  3. Discuss the probable consequences of the Supreme Court decision that stock dividends are not income under the income tax law.
  4. What is the nature and importance of good-will in corporation finance?
  5. To what extent may there be differences in the fair valuation of public utilities for the purposes of rate-making, condemnation, taxation, and capitalization?
  6. Did the Government act wisely in returning the railroads March 1, 1920 to their corporate owners for operation? Why, or why not?

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DIVISION SPECIAL EXAMINATION
ECONOMICS OF AGRICULTURE

Answer six questions 

A

Take from this group at least one and not more than two

  1. Analyze the doctrine of economic rent from agricultural land.
  2. What are the functions of organized speculation in staple agricultural products?
  3. Describe the methods to be employed in making an annual farm inventory.
  4. What subjects are covered by the decennial Federal census of agriculture? What is the statistical value of the results of the several inquiries?

B

Take from this group at least one and not more than two

  1. Trace the history of the relations between landlords and tenants in England.
  2. What have been the most important changes in American agriculture since 1890?
  3. Give a critical account of the land policies of the Federal Government.
  4. Outline the development of the beet sugar industry in Europe.

C

Take from this group at least two and not more than four

  1. What factors determine the most efficient size of farms?
  2. What are the advantages of diversification of crops?
  3. Discuss the future of the meat supply of the United States.
  4. Describe and estimate the advantages and disadvantages of the different methods of marketing farm produce.
  5. State and defend a forest conservation policy for the United States.
  6. Compare the provisions for agricultural credit in two important countries.
  7. What are the principal problems of rural community life in the United States?

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DIVISION SPECIAL EXAMINATION
LABOR PROBLEMS

Answer six questions

 A

Take from this group at least one and not more than two

  1. Discuss the proposal to restrict immigration into the United States by limiting the number of each nationality admitted each year to 3 per cent of the foreign-born of that nationality resident in this country in 1910.
  2. Describe the technique of statistical measurement of the high cost of living.
  3. What are the principal difficulties encountered in the collection of wage statistics?
  4. Analyze the relations between high money wages and high commodity prices.

B

Take from this group at least one and not more than two

  1. Describe the early development of the factory system.
  2. Trace the origins of trade-unionism in the United States.
  3. Write a brief narrative of the movement for a shorter working day.
  4. Review the relations between organized labor and the steel industry in the United States.

C

Take from this group at least two and not more than four

  1. What is “the labor problem”?
  2. Compare American and British labor leadership. How do you account for the differences?
  3. “Employers must be free to employ their work people at wages mutually satisfactory, without interference or dictation on the part of individuals or organizations not directly parties to such contracts.” Comment.
  4. Discuss a proposed law providing that “in the establishment of salaries for school teachers in the city of—, there shall be no discrimination based on sex or otherwise, but teachers and principals rendering the same service shall receive equal pay.”
  5. “The principle that each industry shall support its own unemployed is one that must be established if a real solution of unemployment is to be made.” Do you agree? Why, or why not?
  6. Discuss the relation of shop committees to trade-unionism.

_______________________________

DIVISION SPECIAL EXAMINATION
ECONOMICS AND SOCIOLOGY

Answer six questions

A

Take from this group at least one and not more than two

  1. Discuss the following contention: “The landlord is a parasite since he consumes without producing.”
  2. What is the meaning of “over-population”?
  3. “Hitherto it is questionable if all the mechanical inventions yet made have lightened the day’s toil of any human being.” Comment critically.
  4. What are the interactions of human instincts and modern factory labor?
  5. Discuss the nature and bases of economic prosperity.

B

Take from this group at least one and not more than two

  1. Describe the evolution of language.
  2. Trace the history of the middle class and forecast its future.
  3. Give a brief historical account of the status of women.
  4. What have been the chief cultural consequences of the machine process?

C

Take from this group at least two and not more than four

  1. What is the province of sociology?
  2. Discuss the family as a necessary social unit.
  3. Describe the leading forms of conflict and their effect upon group life. Why are some forms to be preferred to others? What are the factors which determine the forms actually prevailing at any time?
  4. Analyze the sources of prestige and influence in modern society.
  5. “From the standpoint of progress, the value of the individual depends on the excess of his production over his consumption.” Discuss.
  6. What are the criteria and causes of racial superiority?

_______________________________

Examinations not transcribed for this post

History:

General Examination
Special Examinations: Mediaeval History; English History; Modern European History to 1789; Modern History since 1789; American History

Government:

General Examination
Special Examinations: American Government; Municipal Government; Political Theory; International Law

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Source: Harvard University Archives. Divisional and general examinations, 1915-1975 (HUC 7000.18). Box 6, Bound Volume (stamped “Private Library Arthur H. Cole”) “Divisional Examinations 1916-1927”.

Categories
Exam Questions Queen's University Theory

Queen’s University at Kingston. Comprehensive Economic Theory Exam in Economic Theory, 1974

The Coat of Arms of Queen's University

Your curator of the economic artifacts so lovingly transcribed here for future digital generations of historians of economics, human or artificially intelligent, has a weakness for orphaned examinations that he discovers upon riffling through the archival papers of defunct professors of economics. While I have no illusions about being able to give each worthy artifact I stumble upon a warm post in this collection, perhaps others will be inspired by my efforts to join in. Transcribe and upload!

About a dozen years ago I found a folder of University of Chicago economics exams in George Stigler’s papers in which rested a forlorn ten-page Ph.D. comprehensive examination in economic theory from Queen’s University at Kingston, Ontario, Canada (May 1974). I found no clue to the backstory of how this exam happened to have found its way to George Stigler’s papers. Was it from Stigler demand (“Could you send me a copy of your most recent Ph.D. exam in economic theory”) or was it a Queen’s colleague’s pride of workmanship that resulted in the supply? My maximum-likelihood-gut-instinct estimate is that the source was Richard Lipsey, then Sir Edward Peacock Professor of Economics, but it would come as no surprise if there was some Chicago Ph.D. alum on the faculty then at Queen’s who shared the examination with Stigler out of fealty. But the backstory is unimportant for our purposes here, below you will find an excellent comprehensive exam that expands our international cross-section of economic theory questions. Economics in the Rear-view Mirror hereby raises the following artifact from literal archival obscurity to virtual visibility. 

_______________________

QUEEN’S UNIVERSITY AT KINGSTON
Department of Economics

Ph.D. Comprehensive Examination
ECONOMIC THEORY
May, 1974

Answer FOUR (4) questions — one from each of the four parts of the examination. All questions are of equal value.

PART I

  1. Consider a world in which there are two commodities, beer and whisky and four individuals described by the following utility functions:

Tom: UT = 2B + W
Sally: US = B + W
Dick: UD = min (B, W)
Jane: UJ = min (B/2 , W)

where utility (U) is measured in utils, beer (B) in bottles and whisky (W) in shots. Bottles of beer and shots of whisky are perfectly divisible.

    1. Draw the one-util indifference curve for each of these individuals.
    2. Construct Tom’s and Dick’s uncompensated demand curves for beer under the assumption that each has a money income of $10 and the price of whisky is 50¢ a shot.
    3. How much beer would Tom and Dick each consume if their money incomes were each $10 and a bottle of beer and a shot of whisky cost 25¢ and 50¢ respectively? Construct each of their compensated demand curves for beer through this point.
    4. Suppose that Tom and Sally are stranded on an island with 15 shots of whisky and 10 bottles of beer. Use an Edgeworth box diagram to derive the set of efficient (Pareto optimal) allocations of beer and whisky between them.
    5. Suppose that Tom had been stranded with Jane rather than Sally in Part (d). Derive the set of efficient allocations of the 15 shots of whisky and 10 bottles of beer between Tom and Jane.
    6. Suppose finally that Dick and Jane had been caught in the predicament described in Part (d). Derive the set of efficient allocations of the beer and whisky in this case.
    7. Suppose that Dick and Jane had decided to use a price system to sustain one of the efficient allocations in Part (f). What would be the effect on the price of whisky of a decrease in the endowment of whisky from 15 to 12 shots?
  1. Assume a simple Keynesian type model in equilibrium with unemployed resources. Consider the effects on the velocity of circulation of money of (a) an upward shift in the consumption function, and (b) an open market purchase by the central bank. Answer the question under each of the following alternative assumptions.
      1. The money supply is fully exogenous.
      2. The money supply is partly exogenous and partly endogenous, the endogenous part being a function of national income and “the” rate of interest.
      3. The money supply is wholly endogenous because the monetary authorities are stabilizing domestic interest rates.

In answering this question assume a general demand for money function of the form

MD = L(Y,r)

in which the only restrictions are LY > 0, Lr  ≤ 0.

You should also pay attention to the following two special cases:

a) Lr = 0, LY > 0 and b) Lr > 0, (Y/M)LY = 1.

In so far as you have time, give explanations of your results.

  1. Make the following assumptions about the market for cloth and yarn in a small country:
    1. One spool of yarn is required for the manufacture of one bolt of cloth.
    2. The world price of yarn is $1 per spool and the world price of cloth is $3 per bolt.
    3. The domestic demand curve for cloth, the domestic supply curve of yarn, and the domestic supply curve of factors of production (other than yarn) in the manufacture of cloth have constant elasticities, and these elasticities are -1, 1 and 2 respectively.
    4. In free trade, domestic consumption of cloth is 1,000,000 bolts, domestic production of yarn is 100,000 spools, and domestic production of cloth is 200,000 bolts.
      1. What tariff on cloth would just compensate factors of production in the manufacture of cloth for the imposition of a 15 percent tariff on yarn?
      2. What is the total welfare loss of imposing both tariffs?
      3. What would be your answer to (ii) above if the 15 percent tariff on yarn were imposed without the compensating tariff on cloth?
      4. In general, if there is to be a tariff on yarn, how does one determine the welfare implications of imposing a tariff on cloth, too?
      5. How would your answers to Parts (i) and (ii) above be affected if the elasticity of substitution between yarn and other factors in the manufacture of cloth were greater than zero?

PART II

  1. Consider an economy producing two goods, X1 and X2, according to constant returns to scale production functions of the following form:

(1)        X1 = F1(L1)
(2)        X2 = F2(L2, X12)

where Xi is the gross output of the i-th good, X12 is the amount of X1 used as an input in the production of X2, Li is the amount of labour used in the production of Xi and the total supply of labour is fixed

{L_{1}+L_{2}=\bar{L}}

Tastes in this economy can be represented by the utility function

U = AXi.25 X2.75

A) Suppose that equations (1) and (2) are of the particular form:

(1′)       X1 = 2L1
(2′)       X2 = L2

and the total labour supply is 200 units.

    1. Construct the economy’s production possibilities set.
    2. What will be the effect on the equilibrium relative price of X1 of:
      1. an increase of the labour force to 225 units,
      2. a doubling of the efficiency of labour in the X1 sector?

B) Suppose now that equations (1) and (2) are of the particular form:

(1”)      X1 = 2L1
(2”)      X2 = min (L2, 4X12)

Answer Questions A(a) and A(b) under these circumstances.

C) Answer the same questions in the case where a second production process is made available to the X2 sector so that the production functions are of the form:

(1”’)     X1 = 2L1
(2”’)      X2 = (min (L2, 4X12)   or   min (.75L2, 8X12)

D) What would be the general shape of the production possibility curve if X2 could be produced according to a differentiable concave constant returns to scale production function of the general form of (2) (e.g., Cobb-Douglas) while the production function for X1 remained X1 = 2L1?

  1. Standard demand theory predicts that if a man buys more apples when his income goes up he buys less apples when their price goes up. Say whether this prediction continues to follow, and why or why not, under each of the following circumstances.
      1. The quality of apples is judged by their price.
      2. The man is upset by his neighbour’s discarded apple cores.
      3. The man owns an apple orchard.
      4. The man loves the scent of apple blossoms.
      5. Apples are storable cheaply enough that one can speculate in them.
      6. The man drinks cider, the market price of which is positively related to the price of apples.
      7. Apples are a heavily advertised good.
      8. Apples and flour are only consumed in fixed proportions, in the form of apple pies.
      9. The price of apples divided by the price of pears is not equal to the man’s marginal rate of substitution between apples and pears.
      10. All goods are rationed, in such a way that they must be paid for not only with money but also with ration coupons, each consumer having a fixed total coupon allowance. (Coupons may not be bought and sold.)

6. [Capital theory and functional income distribution]

    1. You are dealing with an economy in which there is only one product which is used either as a consumption good or as a capital good. Each period’s output is divided in some proportion between consumption use and additions to the capital stock. Capital goods do not depreciate. There are two factors of production, labour and capital goods, available in fixed supply in the short period. There is no unemployment of any factor that has a positive price.
      1. In what circumstances will the functional distribution of income be determined by conditions in the factor market only?
      2. Given that investment is exogenously determined and consumption is functionally related to incomes, in what circumstances might the functional distribution of income be determined from conditions in the product market?
      3. In what circumstances would the distribution of income be indeterminate?
      4. In what circumstances might conditions in the factor and product markets be inconsistent with a determinate distribution of income?
    2. Now consider an economy with two consumer goods, one of which can also be used as the single capital good, both products being produced by labour and capital goods. Again there can be positive investment in each period and there is no depreciation.
      What would your answers to questions (i), (ii), (iii), and (iv) of part (a) be now?

PART III

  1. An economy producing only one commodity, which may be used either as a consumer good or as a capital good, has a production function of the form

{Y_{t}=e^{\lambda t}K^{\alpha }_{t}L^{1-\alpha }_{t}}

and we are given that

{L_{t}=e^{gt}L_{0}}

where Yt is the quantity of output; Kt  is the capital stock; Lt the number of units of labour; g is the rate of growth of the labour force; {\lambda}  is the rate of Hicks neutral technological change; and {\alpha} takes the values 0 < {\alpha} < 1.

a) [“Golden-rule”]

      1. Derive the general formula that determines the golden rule capital-labour ratio when there is no technical change.
      2. Let g = 0.02, {\lambda} = 0, {\alpha} = 0.25. Calculate the golden rule level of the capital-labour ratio. (Carry your calculation to the last stage in which the solution is set up in the form of logs or as a power of a number.)
      3. Now let the growth rate of the labour force rise to .03. Find the ratio of the new golden rule capital-labour ratio, k1, to the old golden rule capital-labour ratio, k0.
      4. Maintain the growth rate of the labour force, g1 at .03 and make {\lambda} = .0225. Obtain the golden rule values of the path of the capital-labour ratio, labour being measured in natural units.

b) [Optimal steady state growth]

      1. Derive the rule that determines the capital-labour ratio of the optimal steady state growth path when there is positive subjective discounting of future per capita utilities at the rate, {\rho}.
      2. Assume that g = .02, {\lambda} = 0, {\alpha} = 0.25 and {\rho} = .04. Calculate the capital-labour ratio of the optimal steady state growth path.

8. [Keynesian macroeconomic theory]

    1. Investigate the consequences for fiscal and monetary policy in a simple Keynesian model of assuming that consumption expenditure is unrelated to current income (because it is related to permanent income which is assumed constant over the time period in which we are interested). Would it matter whether or not there were some other element of aggregate expenditure that was related to current national income?
    2. Explain how the permanent income hypothesis reconciles the observations drawn from long and short period time series and cross section studies that appeared inconsistent with the Keynesian consumption function. Is the weight of evidence such that we can have substantial confidence in the truth of the general concept that consumption relates to permanent rather than current income?
    3. Briefly discuss the significance for the efficacy of short-term fiscal policy of establishing that consumption is a function of permanent income rather than current income.
  1. Examine the validity of the following statements: a) when wages are only flexible upwards and b) when wages are fully flexible.
      1. Government spending in excess of tax revenue is inflationary in the long run.
      2. Union wage pressure can reduce unemployment due to the stimulating effects of higher wages on aggregate demand.
      3. Sooner or later automation will cause unemployment.
  1. “Thinking about saving and investment from this technocratic point of view has convinced me that the central concept in capital theory should be the rate of return on investment. In short we really want a theory of interest rates, not a theory of capital.” (Solow: Capital Theory and the Rate of Return, p. 16. Italics in the original.)
    1. What is the relationship between the two sentences in Solow’s quotation that makes the second sentence follow from the first? In your answer elaborate on the concept of the rate of return.
    2. Can stocks of capital goods (or the aggregate of asset values) be more or less excluded from capital theory, which among other things must include a theory of intertemporal choice?

PART IV

  1. Various officials and ministers of the Canadian government have expressed concern and implemented or at least suggested policies in response to recent increases in the world prices of certain commodities. One instance has been the imposition of a tax on exports of Canadian oil. This move has been hailed by members of the government on various grounds: its “anti-inflationary consequences”, its “benefit to the poor and to fixed income classes to whom cheap energy is so vital” and “the stimulus it will provide to the Canadian manufacturing sector”. Some observers have been obviously impressed with the success of this policy and have suggested a similar two-price system for certain Canadian agricultural exports because “there is no reason the Canadian consumer should suffer due to a world scarcity of these commodities when there is an abundant supply in Canada.”
    1. Attempt to give a precise formulation to the exact policy goals which might be implied by each of the above quotations.
    2. How would an export tax help to achieve each of these goals?
    3. What would be the nature of the economic costs resulting from the use of an export tax to achieve these goals and what would determine the magnitude of these costs?
  1. A certain country, previously without an unemployment insurance system, sets one up. Its rules are as follows:
      1. A minimum of 10 weeks work must be done before any benefits can be drawn.
      2. For each week worked above 10, a person is entitled to two-thirds of a week on unemployment benefits, except that no more than 12 weeks of benefit can be received in a year.
      3. While on benefit the weekly payment is three-quarters of the weekly wage previously earned.

To simplify the problem, the following assumptions may be made: how the system is financed is irrelevant; each year is self-contained, in the sense that benefits earned must be used up in the year or lost; one can draw benefit even if one quits voluntarily; no time is ever lost in finding a job if one wants one; a year is 50 weeks long.

    1. Establish that a person’s income-leisure opportunity locus consists of four line segments, and draw them on the accompanying graph paper.
    2. Will anyone ever work exactly 10 weeks under the new unemployment insurance system? Explain.
    3. If leisure is a superior good, prove that those who used to work between 28 and 38 weeks a year (before the new unemployment insurance system) will now work less.
    4. Define a “full-time worker” as one who works more than 38 weeks a year. Would you expect such a worker to work less after the scheme is introduced?
    5. Demonstrate the possibility that people who did not work before will now work. Could they conceivably become “full-time” workers? Why or why not?
  1. Consider a country with the following attributes:
      1. It has a floating exchange rate.
      2. It has a substantial rate of inflation which it is trying to lower.
      3. It has recently taken monetary action that has raised interest rates relative to those of other countries.
      4. It is buying quite large amounts of foreign exchange, apparently to have a dampening effect on the rise in the exchange value of its currency.
      5. This foreign exchange is acquired by use of government cash which requires extra government borrowing to the extent that the exchange accumulation was not foreseen (the country has been lucky in its foreign exchange receipts and disbursements for oil roughly matching).
      6. The country has outstanding large amounts of non-negotiable savings bonds which are redeemable on demand at face value, which have coupon rates considerably lower than rates of comparable securities, and which are being cashed in substantial quantities.
    1. Are the objectives implied by the above actions mutually consistent? Always? In some circumstances? Never? In your answer elaborate on the relevance of some of the parameters of the system to it.
    2. The federal government of this country will be bringing down its annual budget soon. What policies would you recommend (i) to alleviate inconsistencies in the implied objectives noted above, and (ii) to reinforce the impact of the actions described above?

Source: University of Chicago Archives. George Stigler Papers, Addenda. Box 33. Folder “Exams & Prelim Questions.”

Image Source: “Coat of Arms” in the on-line Queen’s Encyclopedia.

Categories
Exam Questions Harvard Socialism

Harvard. Course description and exam for Ethics of the Social Questions. Peabody, 1904-05

With the growth of the Harvard economics and economics-related course offerings exploding at the start of the 20th century, it’s taking more time for Economics in the Rear-View Mirror to work through all the courses, year by year as we move forwards. Of course the collection of artifacts becomes more valuable as the sample size increases, but I am aware that other content is wanted by visitors too. Or at least a nice mixture across time and space.

Anyhow, this post completes the Harvard exam transcriptions for 1904-05. It was not technically an economics course, but enough economics graduate students took the course for this to be considered a serious elective or even field of specialization at the time. And any present day economist not interested in the socio-normative side of economic life is unlikely to follow Economics in the Rear-View Mirror.

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The Instructors

Francis Greenwood Peabody, A.M., D.D., Dean of the Divinity School, and Plummer Professor of Christian Morals. The field “Social Ethics” was his responsibility in the teaching programs of the Graduate School of Arts and Sciences (Philosophy) and the Divinity School (Ethics). It was a fairly popular elective field for graduate students in economics. Exam questions for 1889-90 and most intermediate years have been posted earlier.

David Camp Rogers (1878-1959). A.B. Princeton 1899. A.M. Harvard 1902 Ph.D. Harvard 1903 (Thesis: Coördinations in Space Perceptions). First Professor of Psychology at Smith College, appointed 1914. If this seems like an odd pairing of teaching assistant to professor, it would not have seemed particularly odd at that time. Both the study of ethics and human psychology were covered by the philosophy department. To get a Ph.D. in philosophy would have required examination in several fields of philosophy, so I suppose that ethics, or social ethics, was one of Rogers’ examination fields. He probably did well in the exam and was offered a teaching assistantship in social ethics on that basis.

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Course Enrollment
1904-05
[also listed as Ethics 1]

Graduate School of Arts and Sciences

[Philosophy] 5 1hf. Professor Peabody, assisted by Dr. Rogers. — Ethics of the Social Questions. The problems of Poor-Relief, the Family, Temperance, and various phases of the Labor Question, in the light of ethical theory.

Total 122: 7 Graduates, 35 Seniors, 47 Juniors, 12 Sophomores, 1 Freshmen, 20 Others.

Source: Harvard University. Report of the President of Harvard College, 1904-1905, p. 76.

The Divinity School

[Ethics] 1 1hf. Professor Peabody, assisted by Dr. Rogers. — Introductory Course. — The Ethics of the Social Questions. — The modern social questions: Charity, the Family, Temperance, and various phases of the Labor Question, in the light of ethical theory. — Lectures, special researches, and required reading. Half-course.

Total 122: 7 Graduates, 99 College, 5 Sc., 11 Divinity.

Source: Harvard University. Report of the President of Harvard College, 1904-1905, p. 173.

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Course Description
1904-05

Ethics
  1. Introductory Course. The Ethics of the Social Questions. — The modern social questions: Charity, the Family, Temperance, and various phases of the Labor Question, in the light of ethical theory. Lectures, special researches, and required reading. Tu., Th., Sat., at 10. Professor Peabody, assisted by Dr. Rogers.

This course is an application of ethical theory to the social problems of the present day. It is to be distinguished from economic courses dealing with the same subjects by the emphasis laid on the moral aspects of the social situation and on the philosophy of society involved. Its introduction discusses various theories of Ethics and the nature of the Moral Ideal [required reading from (John Stuart) Mackenzie’s Introduction to Social Philosophy]. The course then considers the ethics of the family [required reading from (Herbert) Spencer’s Principles of Sociology (3rd edition: Vol. 1; Vol. 2; Vol. 3)];the ethics of poor-relief [required reading from Devine, The Practice of Charity, and from Charles Booth’s Life and Labour of the People in London (1903 edition) [First Series, Poverty: Vol. 1; Vol. 2; Vol. 3; Vol. 4. Second Series, Industry: Vol. 1; Vol. 2; Vol. 3; Vol. 4; Vol. 5. Third Series: Religious Influences: Vol. 1; Vol. 2; Vol. 3; Vol. 4; Vol. 5; Vol. 6; Vol. 7; Concluding Volume]; the ethics of the labor question [required reading: J.A. Hobson, The Social Problem; Schäffle’s The Quintessence of Socialism] and the ethics of the drink question [required reading from Rowntree and Sherwell, The Temperance Problem and Social Reform]. In addition to lectures and required reading two special and detailed reports are made by each student, based as far as possible on personal research and observation of scientific methods in poor-relief and industrial reform. These researches are arranged in consultation with the instructor; and an important feature of the course is the suggestion and direction of such personal investigations, and the provision to each student of special literature or opportunities for observation.

A special library of 700 carefully selected volumes is provided for the use of students in this course.

Source: Announcement of the Divinity School of Harvard University 1904-05, pp. 21-22.

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PHILOSOPHY 51
THE ETHICS OF THE SOCIAL QUESTIONS

This paper should be considered as a whole. The time should not be exhausted in answering a few questions, but such limits should be given to each answer as will permit the answering of all the questions in the time assigned.

  1. The chief historical steps in the evolution of the family.
  2. The relation of the Family to the State:—
    (a) As urged by Mr. Spencer (Spencer, Sociology, I, 707).
    (b) As proposed by “Scientific Socialism.”
  3. Certain economic movements which affect the integrity of the Family.
  4. The causes of poverty, classified and compared.
  5. The evolution of the “Double-Decker,” and the provisions of the New York “New Law” for tenements.
  6. Charles Booth’s Class E in East London; its dimensions, special risk of degradation, and the way of security proposed.
  7. Some elementary principles of organized charity (Devine, The Practice of Charity, ch. IX).
  8. Compare the “Case System” with the “Space System.”
  9. Compare the Church Districting System with the Liverpool system of collection.
  10. Germany and Belgium compared in their provision for the “out-of-works.”

Source: Harvard University Archives. Harvard University, Examination Papers 1873-1915. Box 7, Bound volume: Examination Papers, 1904-05; Papers Set for Final Examinations in History, Government, Economics,…,Music in Harvard College (June, 1905), p. 45.

Image Source: Harvard University Archives.  Francis Greenwood Peabody [photographic portrait, ca. 1900], Colorized by Economics in the Rear-view Mirror.

Categories
Exam Questions Johns Hopkins Money and Banking

Johns Hopkins. Semester Exams for Monetary Economics. Musgrave, 1959-1960

 

From 1958 through 1962 Richard Musgrave was Professor of Economics at Johns Hopkins. One thinks of him today as a giant in the history of public finance but the examination below reminds us that he was also an economist who still taught graduate courses in monetary economics/policy at least into the early 1960s.

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More about Richard Musgrave

All posts with the tag “Musgrave” here at Economics in the Rear-view Mirror.

In particular one post with biographical and career information.

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Richard Musgrave
Faculty of Arts and Sciences — Memorial Minute

At a Meeting of the Faculty of Arts and Sciences April 8, 2008, the following Minute was placed upon the records.

Richard Musgrave, the Harold Hitchings Burbank Professor of Political Economy, Emeritus, was the leading public finance economist of his generation. He died on January 15, 2007, at the age of 96.

Richard Abel-Musgrave was born in Königstein, Germany, and educated in Munich and Heidelberg. He was of half Jewish ancestry, his paternal grandfather and maternal grandmother both being Jews who had converted to the Christian faith.

He came to the United States in 1933 as an exchange student at Rochester University but soon transferred to Harvard where he received his PhD in 1937. He decided not to return to Germany and applied for U.S. citizenship in that same year. At that time he dropped the hyphen in his family name, becoming Richard Abel Musgrave. He was known thereafter as Richard Musgrave.

After completing his PhD, Musgrave worked at the Board of Governors of the Federal Reserve until 1948. He then taught at Johns Hopkins, the University of Michigan and Princeton before joining the faculty at Harvard in 1965. He held simultaneous appointments in the economics department and in the Harvard Law School, the first person to hold a joint appointment in both the Faculty of Arts and Sciences and the Law School. Professor Musgrave took emeritus status in 1981 and moved to California where he was an adjunct professor at the University of California at Santa Cruz.

Although the 19th-century giants of political economy, David Ricardo and John Stuart Mill, wrote extensively about the theory of taxation, by the middle of the 20th century the teaching and writing on public finance in the United States was largely descriptive and institutional. Richard Musgrave changed all of that with his major volume, The Theory of Public Finance, published in 1959.

The Theory of Public Finance was both a theoretical research monograph and a text book. It applied the analytic tools of price theory and of Keynesian macroeconomics to the issues of tax incidence (i.e., who bears the burden of taxes), of efficiency (i.e., measuring the losses caused by the distorting effects of taxes), and of achieving full employment. All of this was done in a very readable and accessible way that made the book very widely studied. The book proved to be a particularly significant resource for tax law professors in their teaching and writing about federal tax policy.

A key feature of Musgrave’s Theory of Public Finance was the division of the problem of public finance into what Musgrave called three “branches.” One “branch” was devoted to the problem of achieving full employment. Here Musgrave applied the ideas of Keynesian fiscal policy to using tax reductions and government spending to increasing aggregate demand. A second “branch” focused on economic efficiency, i.e., on the design of taxes that would raise revenue with the least distortion to incentives and therefore the least loss of real incomes. The third “branch” then dealt with issues of redistribution to achieve a politically acceptable distribution of income. These branches were of course just pedagogical devices and not a way of organizing the actual making of policy.

Richard Musgrave was an inspiring teacher. It was clear to his students that he cared about both the analytic science in public finance and the practical implications of that analysis for improving our tax system. He taught students to think about the impact of taxes on economic efficiency while not losing sight of their distributional consequences. Or, as he might have said, to think about the distribution of the tax burden and the use of taxes and transfers to redistribute income while not losing sight of the consequences of the progressive tax and transfer structure on economic efficiency.

In the weekly graduate seminar in public finance, graduate students and visiting faculty would present their latest research. The seminar brought together not only graduate students and faculty from the department of economics, but also tax specialist members of the Harvard Law School faculty. Their presence added a greater degree of practical focus to the seminar’s discussion of tax reform. Musgrave’s questions and insights kept the seminar focused on the substantive importance of the problems rather than on the more abstract methodological issues. Many of the students taught by Richard Musgrave went on to do important work in public finance.

Although Musgrave felt strongly about tax policy and about transfer programs like Social Security and unemployment insurance, he was not an activist who tried to influence outcomes in Washington. He appeared to believe that he was most effective in developing the analysis and teaching students who would carry this material into practice.

An important exception to this was a major report on fiscal reform in Columbia that Musgrave prepared jointly with Malcolm Gillis in 1971. This report, prepared under the auspices of the Harvard International Tax Program of the Harvard Law School, was based on extensive and detailed work in Columbia.

Richard Musgrave was elected a Distinguished Fellow of the American Economic Association in 1978. Musgrave was one of the organizers of the International Seminar in Public Economics which brought together American and European faculty members who specialized in public finance. He also served as an honorary president of the International Institute of Public Finance.

Professor Musgrave collaborated with his wife, Peggy Musgrave, in writing a popular undergraduate text book, Public Finance in Theory and Practice, which was published in 1973. The Musgraves also found time to reach out to young colleagues and their wives at their homes in Belmont and in Vermont.

Respectfully submitted,

Lawrence Summers
Bernard Wolfman
Martin Feldstein, Chair

Source: The Harvard Gazette. June 12, 2008.

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THE JOHNS HOPKINS UNIVERSITY

Economics 611
Final Examination
Prof. R. A. Musgrave
January 22, 1960

I

Write for forty-five minutes.

There is by now pretty general agreement, among monetary theorists, regarding the various relationships by which the supply of money may affect the level of output and prices. Nevertheless, there remains a division between those who prefer to study the role of money in the framework of an income-expenditure approach, and those who prefer the quantity theory of equation of exchange tradition. What, if any, substantive justification is there for retention of this dichotomy? If there is none, which approach is to be retained? If there is, what distinct purposes are served by the two approaches?

II

Write on two out of the following three questions, thirty minutes each,

  1. Various writers, including Wicksell, Fisher and Keynes, have treated the problem of monetary disequilibrium and the nature of the equilibrating process, in terms of the differential between two rates of interest. Discuss these approaches and compare the concepts of interest used therein.
  2. Where do you stand on the loanable funds—liquidity preference controversy? In particular, are you satisfied that the distinction between the stock and the flow approach to monetary theory is purely terminological?
  3. “It was a great misfortune for the development of monetary theory, that Marshall and Pigou did not stick with their initial intent to relate k to wealth, but proceeded to relate it to income. Thereby was postponed the recognition — so essential for a fruitful approach to monetary theory — that the demand for money must be dealt with in the context of a general portfolio theory.” Discuss.
III

Write on the following three statements, for fifteen minutes each. Indicate whether the statement is right or wrong and why.

  1. “The real balance effect implies that the demand schedule for money has unit elasticity, from which it follows that the price level changes proportionately with the money supply.”
  2. “The liquidity trap is a necessary but not a sufficient condition for under-employment equilibrium.”
  3. “Classical theory was mistaken in assuming that the rate of interest is determined by income independent of money supply. As Keynes has shown, interest is determined by money supply and then determines income.”

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Dr. R. A. Musgrave
Friday, May 20, 1960

ECONOMICS 611
  1. The following changes occur: Bill holdings at the Federal Reserve rise by 100 million, while bond holdings fall by 80 million. Also, bank holdings of bills fall by 70 million, non-bank holdings of bills fall by 30 million, and non-bank holdings of bonds rise by 80 million. What is the resulting change in excess reserves, assuming a reserve ratio of 20%, and why? (Assume that the system retains such changes in excess reserves as result, without reacting with corresponding changes in loans.)
  2. Assume that the system is always loaned up. What will be the effects on member bank reserves and demand deposits of (a) an increase in vault cash by 100; (b) a decrease in currency in circulation by 200; (c) a gold outflow of 300; (d) a decrease in treasury deposits at commercial banks by 500. The reserve ratio is again 20%.

Source: Johns Hopkins University. The Eisenhower Library. Ferdinand Hamburger, Jr. Archives. Department of Political Economy [Records], Series 6/7, Box 3, Folder “Department of Political Economy, Graduate Exams 1933-1965”.

Image Source: Richard A. Musgrave page at the University of Michigan’s Faculty History Project.

Categories
Exam Questions Johns Hopkins Theory

Johns Hopkins. Exam for Welfare Economics. Lerner, 1958

 

Abba Lerner changed his academic locations (including leaves of absence to accept visiting positions) with a frequency rivaled by few. The academic year 1957-58 found him visiting the department of political economy at Johns Hopkins University. The artifact for this post is the final examination for Lerner’s course on welfare economics.

Lerner’s notes for seminars on social welfare functions held at the IMF and at the Cowles Commission in  1952.

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THE JOHNS HOPKINS UNIVERSITY
Welfare Economics
18-640

Final Examination May 20th 2-5 p.m., 1958.
Abba P. Lerner

Answer four questions, in separate blue books, in ink.

  1. Discuss the meaning, the validity and the significance of the proposition that it is impossible to derive a social welfare function from individual preference functions.
  2. How far can one carry the analogy between a political voting procedure and the economic price mechanism, and between the rationale of voting between alternative policies and that of allocating dollars between alternative purchases?
  3. Discuss the rational elements in relation to other elements in the social objectives of optimum distribution of income, optimum population, and optimum rate of saving.
  4. What is sound, what is unsound, and what is useful in the doctrine of consumers’ surplus?
  5. Why is it socially desirable to have the prices of products equal to the value of the marginal factors used in their production? How is this objective affected by equity elements such as the need for subsidies?
  6. Under what conditions would a partial freeing of trade be harmful to society in the largest sense? In your answer explain the treatment of this problem in terms of “second best” and the use of the concept of “divergence”.
  7. Compare the arguments for the imposition of trade restrictions for the sake of affecting the international terms of trade with those undertaken for the sake of affecting the domestic distribution of income. Give special attention to the interdependence of efficiency and equity considerations.

Source: Johns Hopkins University. The Eisenhower Library. Ferdinand Hamburger, Jr. Archives. Department of Political Economy [Records], Series 6/7, Box 3, Folder “Department of Political Economy, Graduate Exams 1933-1965”.

Image Source: Photograph of Abba Lerner printed in an announcement for his speech “Israel—The Next Ten Years” (February 25) at the 1958 Forum presented by Beth Emet the Free Synagogue (Evanston, Illinois). Library of Congress, Manuscript Division. The Papers of Abba P. Lerner, Box 6, Folder 8 “ ‘B’ miscellany”. A copy of the announcement was posted by Ellen Blum Barish in Tablet (January 14, 2014).