Jnu questions

[kavya]

do we solve this q using rank ordering . Please explain.

[MI]

Hey Kavya,

I think alternative y is pareto optimal.

I approached the question following way:

Let X be pareto optimal, in this case R1, R4 and R7 are getting the most preferred bundles. Rest are worse off as they are getting the least preferred one.

Now ask the question is there any way to make any of R -2,3,5,6 better off without making R- 1,4,7 worse off.

And answer is yes.... choosing Alternative Y  makes R-2,5 better off and R-1,4,7 are indifferent.

So clearly X is not the pareto-optimal allocation.

To Check whether Y is pareto optimal or not we try giving Alternatives Z and W to these people. We can make R-3,6 better off at the cost of making people R-1,2,4,5,7 worse off  by shifting to W or Z.

So Y is pareto optimal.

Similarly, Z and W are also pareto optimal.

[kavya]

MI, .. I got it thanks.



is the ans. to this option e?

[Ankit Agrawal]

Yes the answer to this question is (e). This type of series is called a harmonic series. The sum of this series blows up to infinity.

You can read more about it here: http://www.jimloy.com/algebra/hseries.htm

[laracroft]

Hello... I couldnt understand why Z and W are also pareto optimal??

If we continue the reasoning the same way as before, then giving Z makes 1,4 and 7 worse off while makes the rest better off.
If we take W, then again, others are being made better off but 1,4 and 7 are being made worse off... how to resolve this ????????????

Also, here we have to assume first that X is pareto optimal and then proceed...??...

[MI]

You can start by assuming any of four alternatives as pareto optimal. There is no restriction on what we have to start with X.

Z is pareto optimal in following way

Lets start with Z allocation in which R-3,7 receive most preferred bundles while others are not at their maximum point. Lets try making others better off.... can we do this without harming R-3,7?  NO

Thats why Z is pareto optimal.

W is not pareto optimal as As we move from W to Z many all people are made better off. So its a pareto improvement.

Sorry for suggesting that W is pareto optimal.

[laracroft]

Thanku so much MI !
:)

[kavya]

ankit thanks a lot that was really helpful.

[kavya]

why is d the ans?

[kavya]

Q. The point of intersection of the "less than" and the  "more than" give corresponds to

a. mean  b. median c. 3rd quartile d. none of these

[Sumit]

@kavya: Answer Could be any a) & d)
Explanation Acc. to me:
option A)we normally hv this type of cost function...where K & L are not substitutable..
option B)A firm can hv this type of cost function when K & L are perfectly substitutable....(i.e the firm will use that input which is cheaper which in turn decided by w & r).
C)Not a cost function just mention TR/C (i.e total revenue to total cost).
D)this can be a cost function of a firm which neither hv economics of scale(i.e situation doubling output with less than doubling cost) nor diseconomics of scale or in other words we can say that firm is operating at minimum Average cost.(i.e operating neither in short run nor in long run).

If I had this question in exam I would hv marked option a).

Are all these questions you r posting is from JNU papers???? or something else????

[kavya]

@sumit: I would have opted for option (a) as well... but it says option (d) alone at the back of the DSE question paper set..(the ans were downloaded from economics entrance weebly).

[kavya]

@sumit ..except for the last 2 rest are from JNU. 2nd last one from  DSE.

[kavya]

@sumit the ans is d only...cost fn of any firm is a fn of its o/p and i/p prices.