DSE 2013 Paper Discussion

[Akshay Jain]

This ques can also be done by using the defination of the derivative
f(3)=2....nw if v increase x by 1 unit dn min increase in f(x) will 3 and max increase vl be 4 for all values of x
thus the min value of f(5)=2+3+3=8 and max f(5)=2+4+4=10
thus 8<=f(5)<=10

[Granpa Simpson]

Thank you Akshay...your method seems much easier...

[Akshay Jain]

@subhayu.....i strongly believe in jugaad........

[SoniaKapoor]

akshay,how did you get f(5) as 2+3+3=8
i mean why are we adding 3 twice??

[Akshay Jain]

Its f(3)=2
min value f(4)=2+3=5
min value of f(5)=5+3=8
that is vy v are adding 3 twice

[kangkan]

@akshay..any good material for lexicographic preferences..DSE seems to love lexicographic pref :(

[Akshay Jain]

Hahahaha...yes...thats indeed true....let me see if i can find something good...

[xyz123]

what is the alpha value coming in question 34 series 1?

[kangkan]

the alpha is option C

[kangkan]

Hey guys..how do i check the existence of an unique slotuion for the System Ax=B where A is an m*n matrix with m>n....thanks

[Akshay Jain]

Unique solution exists when the matrix A is a non singular matrix or all the columns/rows of the matrix are linearly independent.....

[kangkan]

thanks akshay :)

[kangkan]

Hey guys..with regards to the lexicogrpahic questin..i think here are the ans..i think for the 1st one, its is option b..lets assume px=2 and py=4  now the respective endowments are worth 20 and 40...but at these price agent 1 will still demand 10 and agent 2 will still demand 10 too..hence,the excess demand will be zero..by walras law,these prices shud be an equlibrium

Now second..here px=2 and py=4 and the agent will demand 20 units of good x...so excess demand wont be zero in one market...   lets assume prices to px=py=4..then endowments are worth 40 each...they will demand 10 each...so the option shud be d.

@akshay..please help :)

[Akshay Jain]

Pls mention the ques numbers nd series of the ppr

[The Villain]

series 1...quest 39 and 40
i'm getting 39 a and 40 d....
pls confirm akshay..

[Akshay Jain]

In ques 39 no trade vl take place as both the consumers prefer their endowments coz of lexicographic preferences....so any pair of positive prices vl survive as a comp equilibrium price.....option b
ques 40 is option d bcoz there vl be one for one trade b/w both of dem.....if unclear on this...try edgeworth box.....

[kangkan]

sorry akshay..and thanks a lot for responding anyways :)
is there any relationship between a competitive price and nash equilibrium?

[Akshay Jain]

Yes there is a relation....
consider the case of betrand duopoly competition where both the firms has constant MC of c and both the firms set prices simultaineously....
then the competitive price = mc of each firm is a nash equilibrium outcome.....
its just an example.....there can b many others....

[kangkan]

alright..thanks

[econ14]

hey what is the answer for dis??
Suppose in an economy banks maintain a cash reserve
ratio of 20%. People hold 25% of their money in currency form and the rest
in the form of demand deposits. If government increases the high-powered
money by 2000 units, the corresponding increase in the money supply would
be
(a) 5000 units
(b) 2000 units
(c) 7200 units
(d) None of the above