ISI 2017 key

[Abhitesh]

45 55 combination is pareto eff

[Akshay Pamnani]

That is not the only Pareto Efficient outcome,how will you move them from (60,40) to (55,45).
Gaurav would not like that,would he?
So you would be making one person better off and the other one worse off necessarily,hence Pareto efficiency.

[Abhitesh]

Same argument can be made about 90 10 also. In my opinion the prof has a social planner role he will like maximize combined utility.

[Akshay Pamnani]

It can't be made for 90,10.Just draw the graph and see,both can be made better off there

[Abhitesh]

Yeah it can't be done for 90 10. But what about the social planner role of researcher. There is no reason for him to prefer one guy over other.

[Akshay Pamnani]

I don't think Pareto Efficiency cares about that,you are talking about equity really,equity is not present,but pareto efficiency is there.

[Akshay Pamnani]

3-How did you get b
I got a.

[Abhitesh]

Q1 - this is from welfare chapter of varian.
Q3 - In order to maximise social surplus use, P = MC = Q/2+31.

[Akshay Pamnani]

1-Are you saying the same question is given in Varian,I could not find it

[Abhitesh]

No... no that is the relevant chap.

[Akshay Pamnani]

Yeah I know that.

And yeah I messed up the 3rd question,Crap!

[Akshay Pamnani]

Check the 11th one,I got c

[Abhitesh]

how are you expecting in peb anyway.

[Abhitesh]

Q11 - Put G=tY+T0 i.e make budget balanced.

[Daffodils]

Yes. 11 c

[Abhitesh]

For a balance budget G=T=tY+T0
So Y=C+I+G
Y= c(Y-tY-T0)+I+ty+T0
Y= (c-ct+t)Y + I + (1-c)T0
Simplify this.

[Akshay Pamnani]

22)Should be (c) right?

[Daffodils]

22 c

[Abhitesh]

let a>1
aL+10 < aL+10a = a(L+10)
((aL+10).aK)^1/2 < a(L+10)^1/2.K^1/2 = aF . This is decreasing.

So 22 should be c

PS - And for Q1 Prop 1 seems to be efficient.

[Akshay Pamnani]

Yeah,seems right!
I only checked for a>1.
Crap!