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Re: Conceptual Doubts from Q 1-20-DSE 2011

Posted by duck on May 27, 2013; 5:56pm
URL: http://discussion-forum.276.s1.nabble.com/Conceptual-Doubts-from-Q-1-20-DSE-2011-tp7581332p7581356.html

Hi.. :)

1) Use higher order derivative test. f''''(x) = 24>0.

2) Eg: x=0, y=1 then f(x,y) = f(0,1) = (-1,1).
Its easy to find its range.

3) Given v1, v2, ...vn are linearly dependent vectors...That is:
c1*v1 + c2*v2+...+cn*vn = 0 such that not all scalars (c1,c2..cn) are zero.
Now, suppose only c1 ≠ 0 and rest all are zero then, we'll have c1*v1 = 0 but this cant be possible as c1≠0 and v1 is a non zero vector. Hence, minimum number of non zero scalars = 2.

10) Each firm would like to supply: q=p/2 (Use P=MC)
Therefore, market supply Q=10*p/2 = 5p and Market demand=100-15p
Solve them you'll get p=5.
[They're asking you to find Short run Competitve equilibrium]

11)New supply: Q=20+3(p-10) ; Demand=100-p.
Equate Demand and Supply, you'll get p=27.5
Therefore, change in p= 27.5-20 = 7.5
[Its simple demand and supply question with impostion of taxes]

12) Find TR by multiplying "q" on both sides of inverse demand function.
Find MR and equate it with MC.
You'll get p=40

13) Read Stackelberg model.

16) Y=cY+I(r) where c=Marginal propensity to consume and Investment(I) is a function of rate of interest(r) and is negatively related with r.
⇒ Y = I(r)/(1-c)
⇒ SLope = dr/dy =1-c
Now, if c increases.  Slope decreases. This make IS flatter.

17)leave the LM curve unchanged (assuming that we are plotting it in (Y, i)−space where Y is income and i is nominal interest rate)

18) Marshal lerner condition.

:)