Re: DSE 2012- Question 42-44, 48 and 55-56.

Posted by Ankit Agrawal on Apr 29, 2013; 10:34am
URL: http://discussion-forum.276.s1.nabble.com/DSE-2012-Question-42-44-48-and-55-56-tp7580163p7580222.html

Q 55)

Let x represent mark up

F(u,A)= (A/u) - 1

F(u,A) = 1/(1+x)

A/u -1 = 1/(1+x)

Re arranging the above equation,

u = A(1+x)/(2+x)-----(1)

Hence, this is the answer to q 55.

For Q 56) Use equation 1, and Simply substitute the variables with any number, you will get the answer.

I put:
x=1
A=90
Y(gamma)= 10%

So if you put these numbers in eq 1, you get:

2/3(90)=60

Now if you increase A by Y, i.e., 90 by 10%, the corresponding increase in u, i.e. 60, is also 10%, i.e. Y.

So if the workers productivity increases at a constant rate Y, then the rate of unemployment also increases by Y.

Hence answer is (a)