Chicago. PhD Exam in Economic Theory. Autumn 1946

 

Links to previously posted Chicago prelim exams.

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ECONOMIC THEORY

Written Examination for the Ph.D. Degree
Autumn Quarter, 1946

Ph.D. Candidates:  4 hours.  Answer all the questions.  Papers will be taken up after 10 or 15 minutes warning.

1. Define or explain:
   1. Elasticity of Demand; point and arc elasticity; income elasticity; cross elasticity.
   2. Demand curve; utility curve; indifference curve; indifference map; marginal rate of substitution.
   3. Substitution effect and income effect.
   4. Complementary goods.
   5. Real vs. alternative cost.
   6. Price-determined vs. price-determining cost.
   7. Rent and quasi-rent.
   8. Profit.
2. In what sense and under what conditions (if at all) does cost of production determine price, (a) in the long run, (b) in the short run.(If it never does, explain the fallacy.)
3. Briefly describe the three or four main contributions (naming the chief author of each) to the development of the concept of capital and theory of interest, beginning with Ricardo and ending with what you consider “correct” doctrine.In each case bring out the relation of capital to other “productive factors” and to money, and that of its yield to other forms of income.
4. —
   1. Define profit for the purpose of distribution theory.
   2. Discuss the social advisability of a legal limitation, in advance from the beginning, on the rate of return on investment in fields where it is highly uncertain (such as public utilities and explorative and development of natural resources – i.e. single tax).
   3. Comment on the ethics and policy of imposing such a limitation, by regulation or taxation, on enterprises already proven highly profitable.
5. Discuss the wisdom of the policy described in the following quotation:

“In conversations with gold mining engineers a phrase glibly and frequently repeated is ‘sweetening the ore.’ By this phrase reference is made to the practice of diverting production in profitable periods to the poorer ores and perhaps restricting output in the richer fields. Under this practice the better ores are preserved for periods in which mining costs have risen so that over a long period of time output can be held more steady. Contributing also to a policy of sweetening the ores is the reluctance of producers to install capital equipment in a period in which the tendency is for mining expenses to increase with the general advance of wages and living costs. By the time the equipment is installed it might be expected that wages and price levels would be adjusted to the increased price of gold.”

Source: Hoover Institution Archives. Milton Friedman Papers, Box 76, Folder “76.2 “University of Chicago ‘Economic Theory’”.

Image Source: Detail from the Social Science Research Building. University of Chicago Photographic Archive, apf2-07448, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.

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• Economic Theory. 1932-33
• Economic History. Summer 1933
• Money and Banking. Autumn 1933
• Financial System, Financial Administration. Autumn 1933
• Money, Banking, Monetary Policy. Autumn 1946
• Economic Theory I and II. Summer 1949
• Economic Theory I and II. Summer 1951
• Economic Theory I and II. Summer 1952
• Economic Theory I and II. Winter 1955
• Economic Theory I. Summer 1955
• Economic Theory. Summer 1956
• Money and Banking. Summer 1956
• Economic Theory. Winter 1957 [Friedman copy]
• Economic Theory. Winter 1957 [different Griliches copy]
• Economic Theory. Winter 1958
• Economic Theory. Summer 1958
• Money and Banking. Summer 1959
• Economic Theory (Old Rules). Summer 1960
• Economic Theory. Winter 1961
• Economic Theory (Old Rules). Summer 1961
• Price Theory. Summer 1962
• Price Theory. Winter 1963
• Price Theory. Winter 1964
• Price Theory. Winter 1965
• Income, Employment and Price Level. Summer 1967
• Money and Banking. Summer 1967
• Price Theory, Winter 1968
• Price Theory. Summer 1968
• Price Theory. Winter 1969
• Income, Employment, Price Level. Winter 1969
• Money and Banking. Winter 1969
• International Trade. Winter 1970
• History of Economic Thought. Summer 1974
• Price Theory. Summer 1975
• Industrial Organization. Spring 1977
• History of Economic Thought. Summer 1989