Principles of economics final exams set out, implicitly, the core of the discipline. Their questions are designed to test understanding of fundamental economics concepts; the ideas that are the foundation of economic analysis.
So when I came across Clifford L. James's Principles of Economics (first published in 1934; ninth edition in 1956), complete with final examination and answers, I scanned the exam. Download it here. I wanted to know what the foundations of the discipline were 60 years ago, and how have they changed.
One thing that has not changed over the decades is that economics begins with scarcity and problems of resource allocation:
Scarcity is inevitable; people always face trade-offs. Knowing that, it's possible to guess that the correct answer to question 1 is true without knowing what an "economy of abundance" is.
In the 1950s scarcity and resource allocation were analyzed with quite different tools. The approach was more institutional, as revealed by these questions:
The correct answers to the above questions are the ones that makes the United States sound good and the Soviet Union sound bad. Most introductory economics courses no longer discuss comparative economic systems. Today's texts are more likely to contain analyses of minimum wages, carbon taxation, and so on. The authors all strive to be balanced and objective. But I wonder: in 60 years time, will today's exams seem as overtly political as this Cold War-era one does now?
From comparative economic systems, the 1950s economic exam makes a sudden switch to questions that sound more business-school:
It's a reminder of how much territory economics has ceded to business schools over the decades.
While econ 1000 has largely abandoned corporate finance, we've held on tight to those cost curves and production functions. These questions haven't changed in 60 years:
There are more but I won't bore you with them.
There is almost nothing in the 1950s exam about consumer choice. Indeed 1950s-style economics, at least as represented by the Clifford James' text, lines up reasonably well with a perception of economics that I frequently encounter, namely that it's all about business and profits and money.
Here are some of the money questions:
The beliefs people have of what economists do are not wrong, they're just 60 years out of date.
Times change. It's interesting to go through the 1950s examination and try to identify the ones whose answers no longer correspond to what's in the answer key, like this one:
In the 1950s, the answer to question 52 was (3). Today I would have a hard time arguing that economics is more qualitative than quantitive.
The answer in the answer key is (3). Although some might argue whether monopsony or competition best characterizes the labour market, it is make the case that the US labour markets are largely bilateral monopolies.
Then there are these questions:
The correct answer to 72 is pretty obviously 3 - monetary plus fiscal policy can do better than either. But what about that causes of the business cycle question? The correct answer is apparently "2" but that's not obvious to me.
There's also this:
The 1950s answer is true. What's the answer now?
And finally, one last question:
The answer is still (3), notwithstanding current political debates.