DSE 2009 Paper Discussion

[kangkan]

Hi..can someone help with question 26

http://econdse.org/wp-content/uploads/2012/04/2009-Option-A.pdf

[mrittik]

If R is Transitive then R^-1 must be Transitive.....do you understand this?

[Granpa Simpson]

The Cartesian product set of R s.t (x,y)ЄR and (y,z)ЄR is given by,
R=(x,y)*(y,z)={(x,y),(x,z),(y,y),(y,z)}
Clearly if R is transitive implies (x,y)ЄR and (y,z)ЄR implies (z,x)ЄR holds since R is a subset of SxS from the set .
Now consider another set (z,y) and (y,x). Clearly (z,y) does not belong to R same is the case with (y,x). Now according to the definition of negative transitivity (z,x) should not belong to R either. In this case clearly (z,x) does not belong to R too. So it has been proved that operator R is transitive and negatively transitive at the same time. So Assumption 1 is false.
Now consider the set R-1={(y,x),(z,x),(y,y),(z,y)}.
Now from the set R-1 you can easily verify that for every element of R-1 you can establish transitive relation.
For (z,y)ЄR-1 and (y,x)ЄR-1, (z,x)ЄR-1.
You can check for every element in R-1.(So assumption 2 is correct).
Now if assumption 2 is correct, then 3 may or may not hold…so only correct assumption is 2.
This should be the solution according to me..however others plz check and let me know if there is any mistake.

[Granpa Simpson]

Also it can be inferred that R(inv)oR(inv) belongs to the set R(inv) thus R(inv) is transitive.

[mrittik]

Gracias Subhayu....its a great approach...other way we may proceed through a philosophical manner...(Friend,Friend) & (Friend,Friend) then its come to Friend,Friend. Another way to see Negative Transitivity that Foe's Foe is Friend....but again friend's friend is Friend....so what do you think? this is just for instigate paradoxical behaviour of human psychology....ur comment is valuable for me....RSVP

[Granpa Simpson]

Absolutely friend...absolutely sound and ok..after all however we solve, watever we solve and watever we do has got an underlying philosophy..so its a grt approach...

[xyz123]

How to solve question 49? Utility A= (x1+2y1)^2
But I don't know how to proceed from here.
Thanks in advance

[kangkan]

the utility function of A is equivalent to U(x,y)=x+2y..now the other utility function is x+y...draw the edgeworth box..it will be apparent that te option b is correct

[xyz123]

Oh yaa!! Thanks :)

[Ridhika]

But Kangan.. doesnt this option B imply A gets (0,2) and and B gets (4,0) in order to satisfy the relation that in equilibrium the total quantity of a good distributed between both agents = endowment?

But this point cant be the entire contract curve can it?

[kangkan]

for which question?

[Ridhika]

Guys, Question 33 - Is the only way to calculate the difference between each of the 36 possibilies, and evaluate the probabilities of the numbers so received? Or is there a shorter way that Im missing?

[Ridhika]

sorry q49 ..

[Granpa Simpson]

Ridhika actually (xa=0,0<=ya<=0) and (0<=xb<=4,yb=0) are two curves so if you take say point (0,1) on (x=0,0<=y<=0) it means A's consumption is (0,1) and B's consumption is (4,1), and this point is Pareto efficient. Similarly consider a point on the contract curve (0<=x<=4,0) say (3,0) which means B's consumption bundle here is (3,0)and A's consumption bundle is (1,2), this is also a Pareto Efficient point..in this way u will get the answer as b.

[neha:)]

Wt's the ans to Q. 41, 42 and 50? (Just give the options...need to cross-check with mine, since the ans key given by Amit sir is only till questn no.40..)

[neha:)]

sorry.. I got the complete answer key.. my bad!

[neha:)]

Please help with Part 2: Q 25 and 30.
http://economicsentrance.weebly.com/uploads/1/1/0/5/1105777/option-a-2009.pdf

[The Villain]

Hi neha
q25...
we get MRPl as 400-32L
eqaute it this with wage 70
u will get 10.3
therefore ans is 10

[neha:)]

Hi Ron! Why do we need to equate MRPL with wage? Normally we equate it with MC, right?

[The Villain]

@neha These are factor markets conditions.Also firm is monopoly in factor market.Refer Varain or Pindyck if you hve doubt on this.