DSE 2010- Q No: 44,45,46

[madhav]

Hi Amit,

i have a doubt i problem no: 44. the question is too long to write. if you can refer to it  ill be really grateful.

isnt the AS curve supposed to be a vertical line?? how did we get sloping downward in between (mid values of P)?

Q 44,45:  whats the difference between curve shifting up & shifting right? arent both the same?

ive been really struggling with these....thanx a lot again in advance.

[Amit Goyal]

Madhav, you cannot do 44 and 45 unless you know how to do 43.
For 43: AS will be a vertical line in case of flexible nominal wages in the labor market, but it is given that labor market has fixed nominal wages and this causes the shape of the AS curve to be as provided. Note that when the nominal wages are rigid then at prices where there is a mis-match between demand and supply of labor the equilibrium labor employed is given by min{Demand for labor, Supply of labor}.
Once you know how to do 43, you will automatically know the difference between up and right (provided you know the meaning of up and right which i think you do know).

[madhav]

thank you very much amit....i'll ruminate on it.

[deepesh]

can you explain this..how is supply curve shifting, meaning of up and right?

[Ayushya Kaul]

I got Amit Sir's explanation here, but I couldnt still couldn't around answering Q43-44.

And, I still haven't figured out the difference between shift up and shift right.
Any help anyone?

http://economicsentrance.weebly.com/uploads/1/1/0/5/1105777/option-a-2010.pdf

[Shivaji]

Hey..yes I do need help..could you please explain that how did we derive the AS curve in question 44. I think that's the crux of the question and once we solve 44, 45 and 46 are still attempt able. Thanks! Do reply :)

[madhur1987]

please if someone can explain how to go about que 43.