Re: DSE 2012 paper discussion-Please join

Posted by phelps.phan on May 29, 2014; 10:17pm
URL: http://discussion-forum.276.s1.nabble.com/DSE-2012-paper-discussion-Please-join-tp7590218p7591059.html

Guys pls clarify my doubts below. Appreciate your help.

Q 2: Why not option a. If he transfers a part of his endowment, he is willing to trade off by market mechanism for another consumption bundle isn't it? So he is better off now after transfering. So his first bundle is not pareto optimal right?? Please can you tell the difference b/w option a and b in affecting pareto optimal condition.

Q 5: pls explain the approach.
Q 24: pls explain the approach.
Q 40: pls explain the approach.

Q 45: Seeing this this two variable optimization we get the determinant f11.f22-f12.f21=-1. So we can't say the function has a maximum or minimum in other words concave or convex. It has a saddle point. How then can we say the sets above it convex?

Q 46: How is the answer 2. FOC for (2+x)^3 gives one local extrm as x=-2. And I don't think u can find one with f`=0 for x^(2/3). I'm getting only one local extrm :(.