ISI PEB (Economics), 2014 ANSWERS 1 TO 5..

[kk]

http://economicsentrance.weebly.com/uploads/1/1/0/5/1105777/syll-sample-msqe-peb-2014.pdf

I HAVE SOLVED THE FIRST 5 QUESTIONS OF ISI 2014 PEB ECONOMICS AND I AM GETTING THE FOLLOWING ANSWERS..PLEASE TELL ME IF YOU ARE GETTING THE SAME ANSWERS.

QUESTION 1 (a) QUANTITY=3 PRICE- 7 IN DOMESTIC MARKET. AND PRICE=QUANTITY=5 IN EXPORT MARKET
(b) QUANTITY=2 AND PRICE-8

QUESTION 2 (a) (1) a=b = 20    (2) a=b=5   (b) DEADWEIGHT LOSS= 350 THOUSANDS OF UNITS  (b)PRICE CEILING=RS 30/UNIT

QUESTION 3 (a) (1) MAX PROFIT =532.2 (2) REMAINS SAME  (b) (1) EQUILIBRIUM PRICE =5 (2) DOUBT
QUESTION 4  (a) (1) QUANTITY =8 AND PRICE =12  (2) QUANTITY = 6 AND PRICE =14
QUESTION 5 (a) q1 =q2 =3 (b)  q1=q2 =7/2

[jouse56]

Well Dear I really don’t know much about economics. I generally ask my queries of accounts from Aloke Ghosh as I am a accounts student. If you need any help related to finance and accounts then ask him anytime.

[Zen]

[Zen]

[Anakin Skywalker]

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[Anakin Skywalker]

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[Zen]

@Anakin: You are right for 2(a). I misinterpreted the question. Can you show me how to do question 3(b)?

[Anakin Skywalker]

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[dhruv]

While solving 3.(a), we should calculate two profits, one with price discrimination which gives for (i) 532.5, and one without p.d. by combining two demand curves, which gives 525. So, for (i), owner will give discount to students. But for (ii), in order to get same profits, he/she has to discount non-students, which is impossible, so the owner will charge same price for both types of consumer, hence, profit = 525.

[dhruv]

For 3(b), take utilities from chicken for each person to be their reservation price. If you will draw the curve, you will eq. price to be between 4 and 5. Thus, we will not have a unique solution. Actually, at that price suppliers equals to demand, i.e, 6,7,8 will supply and 1,2,3 will demand.



Also, have anybody solved 10?

[onionknight]

What do you guys think about the 6th one?

[dhruv]

For Q. 6, with rupee to rupee subsidy the Lal family's budget line will be parallel to x-axis and will cut the y-axis at M, where, M is their income and housing expenditure is on x-axis while other expenditure is on y-axis. With new policy their budget will be : x + y = M + 250. Assuming convex preference, the budget with earlier policy will be able to afford goods on higher indifference curve as compared to new policy, also this follows from monotonicity of preferences. But if the family is neutral to housing expenditure then they may be indifferent between old and new policy. The optimal consumption may change if the optimal solution through tangency comes at the point other than (250,M).

[L]

 Q. 10. Budget Constraint: (1+R) Cm + Co = (wh - e(1+R) ) (1+R)
 first order condition: (dU/dCm)/(dU/dCo) = u'(Cm)/(beta* u'(Co) = 1+R

b) We can write it in form of profit maximization
 Z = wh - e(1+R) .......where the profit is used for consumption in period 2 & 3.
dZ/ de = wh'(e) - (1+R) = 0
h'(e) = (1+R)/w

if W increases then h'(e) decreases. H is a concave function, so, if you plot h w.r.t e and isoprofit lines, then you will see optimal education will increase as slope of isoprofit line decreases.

Similarly, if R increases, then, h'(e) increases, then, it will lead to less education.

Correct me if there is something wrong in the reasoning.

[kk]

@Zen  yes the firm is a price taker in the export market..so there will be perfect competetion.so the condition is demand =average revenue=price.there fore 10-q=5 whih gives q=5

[kk]

@Zen in question 2 deadweight loss is 100.correct
 
and in ques 3(b) even i have solved the question using reservation model.and the equilibrium price is 5 because there are 5 traders who value the chicken more than 5 and there are 5 traders who value them less than 5..so those who have value more than 5 will be ready to buy the chicken and those who have value less than 5 will be willing to sell the chicken.price cannot be 4 as the 4th trader will be indifferent

[kk]

how to solve question 7 of peb 2014??
and in the expression for y/n should the expression be free from n??


an  in (2) saving involves 2 periods t and t+1.how to proceed

[Rajat]

KK,
can you pls explain your solution to Q.4

[saumya singha]

[saumya singha]

[Rob]

hi
 how did u use the constraints in this ques to get get 532.5?