JNU 1997-2001 Doubts

[The Villain]

Quest 16 is a
For a compt firm w=Mpl
then find wage to revenue ratio where revenue is y*p
solve...ans is 0.6

[Homer Simpson]

Ron, wouldnt it be (w/p) = MPL as the firm hires up to the point where wage equals marginal revenue product?

[Anjali]

Your logic is right ron but all L is not cancelling out. Still I will try

[The Villain]

ya its mrpl..typing error..
Btw tsuki...hw did u get the deflated value as 100..could u tell..in q 8

[Dreyfus]

Mpl should be equasl to real wage rate w/p....after all benefits ie mpl is in terms of goods and in order to compare these benefits with cost ie w ..the cost should also be in terms of goods ie real wage, w/p

[The Villain]

Help me with this one guys
long run rate of gdp is 5% per yr at full emplyment.
invest rate is 20% and rate of growth of labour force is 2% then capital o/p rtio is2,5,7or 10???

[Anjali]

Tsuki how to identify ques such as 5th ? Like if x= rational is mentioned , then will the function be always discontinuous ?
And great work Vaibhav. It's definitely D !

[Anjali]

And tsuki how are you getting c for 8th ? Shouldn't it be a ?

[Anjali]

small K = k = K/L
rate of growth of k= rate of growth of K - rate of growth of L
ok?
rate of growth of k = (dK/dt)/K - (dL/dt)/L
Now , since in the long run , economy reaches steady state and at steady state rate of growth of k is equal to zero ( capital per person doesn't grow).
this gives ,
(dK/dt)/K = (dL/dt)/L
Now i can replace dK/dt by amount of investment done = savings rate x total output(income)= s * Q,
where Q is the total income ( output).
Next ,substitute this into the equation;
we get Investment/ total capital = rate of growth of labour
(s*Q)/K= 2%
s/capital-output ratio= 2%
we have s = 20%
       => capital-output ratio = 10.

[Anjali]

Tsuki m getting A for ques 3 . How did you get your answer ?

[Anjali]

Ron why are we taking MRP and not MP in this production function question ? I guess labour is paid its marginal product in PC .

[The Villain]

@ Anjali
in pc wages are paid acc to mrpl of labour..real wage is mpl...
and thanzxx...tha was awesome work.. :-)

[Homer Simpson]

Ron, for 8, real income in period 0 is 100 because i assume nominal income as 100 with CPI at 100 (base year value). So real income is (nominal income/CPI)x100

[Homer Simpson]

Anjali, Y has twice the variance of X but both have same mean. clearly, Y has more values spread out towards extremes compared to X. Thus, Max(Y)>Max(X)

[Anjali]

Tsuki but that means that max of x is greater than y. Draw its diagram. The peak value of x is greater than y

[Anjali]

Most welcum !
Btw , what exactly is MRPL ? And how does it differ from MP ?
Tsuki for 8 m getting A

[Anjali]

Could you please show working of 8 tsuki ?
And please someone help me with ques 2
What does net invisible earnings from abroad here ? Are these unilateral transfers or invisible receipts that are used for calculating current account ?

[Homer Simpson]

consider this, Let mean be 2 for both and variance of x be 1 and for y be 2. this means that roughly, maximum values of x could be something like 3 and for y, it will be 2 + root 2. more dispersion means more extreme values (bigger and smaller as compared to mean)

for 8, let nominal income in period 0 = 100
              base year price index   = 100

so real income in period 0 = 100

now in period 2, nominal income = 170
                            price index = 180 (150 + 20% of 150 = 180)

so real income = (170/180)x100 = 94.4

thus, real income has fallen in period 2 as compared to period 0 by 5.56%

[Anjali]

Okay thanks tsuki
Please check question 14
Iam getting option A

[Homer Simpson]

Anjali, check out the first page of this thread. have written some explanations to Bin (14 included)