JNU Questions

[vandita24x7]

@taanya yes 5a
for q27
total income in lifetime is 27 lakhs. divide this by total lifetime i.e. 2700000/(60*12)=3750
hence to enjoy rs 3750 every month of life he shud dis-save now by amnt 2500-3750=-1250.

[vandita24x7]

@ duck  ur response??????

[sakshi]

vandita plz answer 26 of jnu 2011 also..

[sakshi]

for Q 6 i did as we have fixed total revenue so, MR is 0. and MC is fixed at 10... there should be no solution... as i think... guys whats the correct answer and if i m wrong.. whats wrong in this approach...????

[Akshay Jain]

his expected lifetime income is rs 27 laks
for equal consumption every month in all the periods divide 27 laks by 12*60
we vl get rs 3750, dis is the consumption per month requard in 60 years
his youth per month income is 2500 so saving is 2500-3750=-1250.
dis means that he has to borrow rs 1250 per month in his youth

[Sumit]

Guys try these two questions????..n plz don't just mention the answer..also mention the approach you used



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[Taanya]

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[Taanya]

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[Sinistral]

good that you took it in a positive way. i was apprehensive so i deleted that post just after posting.
(and yes, I think we have to use Bayes theorem)
:)

[Ayushya Kaul]

Shouldn't the answer be 6/13.
The probability you gave is the joint probability of both processors working i.e P(E1 U E2)= P(E1)+ P(E2) - P(E1).P(E2).
Correct me if I'm wrong?

[Ayushya Kaul]

Could you confirm the answers for Q1-4?
Especially 1 and 2?

For 2, as per your previous explanations, a profit maximizing output wouldn't exist?

[taanya]

it wont work that way ayushya...
acc to my approach using bayes method u consider all possibilities that is 1 working/2 not, 2 working/1 not and both working...

[Ayushya Kaul]

Are you sure about this?

I thought it would be like this:
E1: processor 1 working
E2: processor 2 working
E: Computer functions

Req. probability= P(E1/E)= P(E/E1). P(E1)/ P(E1/E).P(E1)+ P(E2/E). P(E2)

Just tell me why I'm wrong.

[Sinistral]

i think u r right, just a minor (but important) correction:
Req. probability= P(E1/E)= P(E/E1). P(E1)/[ P(E/E1).P(E1)+ P(E/E2). P(E2)]

[duck]

Hi Sumit.. :)

Q1) P(E1) = 3/4 , P(E2) =7/8
Therefore, P(Computer is functional,E) = 3/4*1/8 + 1/4*7/8 + 3/4*7/8
Now, we know that computer is functional when Processor 1 is working or processor 2 is working or both are working. Therefore, given the computer is functional , the probability that processor 1 is working i.e
P(E1|E) = (3/4*1/8+ 3/4*7/8) / (3/4*1/8 + 1/4*7/8 + 3/4*7/8)


Q2) We know,total expenditure = P*Q.
Its given Total expenditure has risen when price was decreased. This means that increase in quantity must be greater than the  fall in price. This implies that elasticity is greater than 1 ( as elastic demand means % change is quantity is more than % change in price)

[Sumit]

@Duck; thanks a ton....but will you plz clear my doubt in 2nd question...I agree with what you explain in 2nd question.....In fact logically It should be greater than 1 only..But as I try to prove this mathematically what I'm getting is given in picture below....plz mention where I'm going wrong...My gut feeling is saying that there is something wrong with this .... 

[chiraxjr]

Q5) A monopolist faces a demand curve with unit price elasticity of demand. For such a monopolist if MC are +ve;
a) Profit maximizing output dsn’t exist
b) Profit maximizing output is where MR=MC & MR is decreasing
c) Profit maximizing output is where AR=MR & AR is decreasing
d) None of the above

MR=p(1+1/e)=MC

please edit this as-

since elasticity is generally dealt with a negative sign! that is why we have this formula!

MR=p(1-1/abs(e))

so max profit exist! and mr=mc!

[chiraxjr]

Q6) Suppose the monopolist has the C(q)=10q. Inverse demand fn is p(q)=20/q. What is the monopolist’s profit maximizing q?
a) The problem dsn’t have a soln
b) 1
c) Infinity
d) 0

one can calculate the elasticity first by the demand function, which comes out to be -1.

so MR will come out to be 0.

now for profit max we have mr=mc, 0=10 equality is not satisfied so it doesnt have a sol.

[anonymouse]

I think you're getting the error because you haven't considered that dp is negative (as per the question). So d(Exp)/dp is actually negative not positive.

[duck]

Hi Sumit.. :)

E = P*Q
Differentiating both the sides wrt "P":
∂E/∂P = Q + ∂P/∂Q*P
⇒ ∂E/∂P = 1+ e
where e: elasticity of demand.
Now, ∂E/∂P < 0   [As its mentioned as price decreased, expenditure increased. So, they are negatively related. Also, we dont need to consider normal good.]
⇒ ∂E/∂P = 1+e < 0
⇒ e < -1
⇒ Demand is elastic.