Some Questions

[E A Ibrahim]

1. The long-run cost function for each firm that supplies the output Y is given by C=Y^3-4Y^2+8Y. If aggregate demand for the output is given by Y=2000-100P, the equilibrium number of firms in a competitive industry will be equal to
(a) 100
(b) 200
(C) 500
(D) 800

2. If a consumer has a utility function U(x1, x2) = x1.x2^4. Then the fraction of income that he spends on x1 is
(A) 4/5
(B) 1/5
(C) 1/4
(D) Undeterminable. Requires additional information on prices

3. The rank of the matrix, H, is equal to
H= -3  6  2
      1  5  4
      4 -8  2
(A) 2
(B) 3
(C) 4
(D) 0

For the first two questions, I just want to verify whether my answer is correct or not. For the third question, I would like to know the way to solve it.

[Dreyfus]

For 2nd 1/5

[Dreyfus]

And rank for 3rd one is 3, evaluate minor of order 3 if its not 0 den 3 is the rank of H......lbrahim plz tell how to do q1...

[ViV]

2(b)
3(b)

[Spiti]

2) 1/5

3)rank=3
How did you solve 1st

[E A Ibrahim]

4. To minimize deadweight efficiency losses, protection for infant industries should be provided through
(A) Subsidies
(B) Quotas
(C) Tariffs
(D) an overvalued exchange rate.

[Dreyfus]

I think it should b quotas...as if govt provides subsidies to these small firms the dead weight loss will increase although the share of loss by the firms will b less but this subsidy loss will lie on government and hence dead weight loss for sure will not decrease....

[E A Ibrahim]

For the 1st answer is (D) 800.
AC= y^2-4y+8
AC'= 2y-4=0
y=2
P=AC
P=2^2-4*2+8=4
Substituting this in the equation Y=2000-100P
Y=1600
Y=ny
1600=2n
n=800