Doubts DSE 2004

[Aranya]

http://economicsentrance.weebly.com/uploads/1/1/0/5/1105777/26_jun_2004_option_a.pdf

Qsn no 30, how to get prob of the event Y^3>1?????
Qsn no 21-23 how to proceed?

[kangkan]

30...it will be 2p^2...prob(X^2>1)= prob(  |x|<1)=2p  prob (y^3>1)=prob(y>1)=p (by symmetry of standard noraml distri).

there fore ans=2p*p=2p^2

[kangkan]

for 21 to 23...we see that |d(w)-s(w| is minimized at w(real wage)=1/2 ..therefore W=P/2  but we have a minimum wage floor ..hence it will be =max(W0,P/2)

[Aranya]

got it! thanks

[SoniaKapoor]

Q 20...i didnt get it :(

[Aranya]

by equalizing demand and supply u can get eqlm wage rate, then find employment at that wage level.Real output will be a fn of that employment level!