doubts

[SoniaKapoor]

1.The assumption of the convexity of preferences is required
a.For neither the First nor the Second Fundamental Theorems of Welfare Economics.
b.For both the First and the Second Fundamental Theorems of Welfare Economics.
c.For only the First Fundamental Theorem of Welfare Economics.
d.For only the Second Fundamental Theorem of Welfare Economics.


2.As x inc the fn f(x)=2^-x

a.Increases at a decreasing rate
b.Increases at an increasing rate
c.Decreases at a decreasing rate
d.Decreases at an increasing rate

[mrittik]

1.c 2.c....plz check

[Granpa Simpson]

1) d.
2) d.

[Arushi :))]

yes both are d ..

[Granpa Simpson]

1)This is because first theorem of welfare economics states that every Walrasian equilibrium (Competitive Equilibrium) is Pareto efficient while the second theorem states that under conditions of monotonicity and convexity a desired Pareto Optimal allocation will lead to competitive outcome.
2) f'(x)=-2^-x which says that the function is decreasing, now the rate of decrease is given by f''(x)=2^-x>0, thus it is decreasing at an increasing rate..!!!