DSE 2010

[SoniaKapoor]

d 1 gets (1,0) and 2 gets (1,1)

[SoniaKapoor]

I also hve doubt on the lottery 1
part 2,quest 35

[Granpa Simpson]

Is the answer d..?

[Granpa Simpson]

As far as my logic goes it shud be option d this is because option a cannot be the answer as it is not Pareto Efficient and hence cannot be competitive either, its not Pareto Efficient because the by moving to (1,0) and (1,1) agent A will be better off while B will be at the same utility level as compared to the original endowment bundle. Option b cannot be the answer as Agent B is getting worse off than the initial utility level. Similarly option c cannot be a competitive equilibrium because Agent A is getting worse off as compared to the initial bundle. However option d is pareto efficient because no agent can be made better off without making the other worse off. And so it is the only option left to be competitive.

[Akshay Jain]

ques 31

[hs]

akshay why in this case the slope of budjet line would be same while you only posted in another tread that slope of b.line shoud lie between the slope of two ic's..
also u wrote that both should be better off from trade and here only 1 is getting better off

[SoniaKapoor]

Thanxx ...pls help me with lottery one also.

[Akshay Jain]

@himanshu.....in that solution...both shud be better off in that specific case.....dont generalize it...sry if I conveyed any wrng implication to u.....
in this case IC's cannot be made for consumer 1 so dont compare this case with the other case....
I hope u r getting me...

[hs]

so in the case when we have ic's for both consumers ..both shud be made better off in eqm???

[Akshay Jain]

@himanshu...I cant generalize this...depends on the endowments and the utility functions of the consumers...
for example if 1 of the consumers has utility func as perfect compliments then its not neccessary that he will b made better off in comp eqm outcome......

[Akshay Jain]

Ques 35

[SoniaKapoor]

Thanx a ton akshay!

[akanksha]

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


please explain q55-58

[mrittik]

every set is part of the circle...so q55.d.....Z has bigger area than the disc....X has not contained all points that disc contains

[mrittik]

58. For Maxima or Minima, Df(x)=0, D^2f(x)-1=0=>D^2f(x)=1....so it is a convex function, minimum over (a,b)...

[Akshay Jain]

[akanksha]

such a long solution
thanku so much akshay  for the solution and your generosity
really appreciate..thanks  

[simar vijay singh]

how have u made this ic 2...im a bit confused

[Akshay Jain]

@simar...this IC2 is for consumer 2 hu has perfect substitutes type utility function.....IC2 gives higher utility than IC1