consider Ms. Bijlee ,whose utility function is min(E,W),where E is her electricity consumption and W is her consumption of widgets.Suppose Ms. Bijlee's income isRs. 10 and price of eletricity is 1 and price of widgets is 1.In order to curb Ms. Bijlee's electricity consumption the electricity company decides to impose a surcharge of rs.1 on every unit of electricity consumed in excess of 4 units.What is the resulting reduction in Ms. Bijlee's electricity consumption ?
sir i am not getting any of the options as my answer,i am explaining what i have done below.
Budget line E+W=10 for E<4 and E=4 , 2E+W=10 for E>4 from here we are getting E=10/3, before surcharge E=5,so reduction=5/3.
Please give me the solution of the problem
Consider an economy with the aggregate production function Y= alphaK+betaL ,where alpha and beta are positive constants , K is capital , L is labour and Y is output . K is fixed in short run . Perfect competitive producers take the nominal wage rate W and the price level P as given , and employ labour so as to maximize profit .This generates the labour demand schedule .The labour supply schedule is
Ls = -gama+ deltaW/P , where gama and delta are positive constants .Producers and workers have perfect information about P and W .
43.The labour market will clear if and only if
this part I have done.Please solve the following part
44.Assume that the required parametric condition of the previous question holds and that the nominal wage rate is fixed .The short run aggregate supply schedule for the economy is , with Palong the vertical axis and Y along the horizontal axis ,will look as follows:
a.for high values of P it will be horizontal ;for some mid-range values of P it will be downward sloping ; for low values of P it will be horizontal again .
b.for high values of P it will be horizontal ;for some mid-range values of P it will be upward sloping ; for low values of P it will be horizontal again .
c.for high values of P it will be vertical ;for some mid-range values of P it will be downward sloping ; for low values of P it will be vertical again .
d.for high values of P it will be vertical ;for some mid-range values of P it will be upward sloping ; for low values of P it will be vertical again
45. If there is a one shot increase in the fixed stock of the capital stock ,then in the short run aggregate supply schedule will
c.shift to the left
d.shift to the right
Ans. from the production function I get W/P=beta.It means labour demand function is horizontal and labour supply surve is upward sloping . But from this I can not under stand how the aggregate supply curve will loke like.Please reply....
Vary P and solve for the equilibrium level of wage and employment as a function of P. Take this equilibrium employment level as a function of P, put it in the production function to get the total output as a function of P. And thats your aggregate supply.
Consider a Person who consumes water and bread , deriving utility xy if x is the amount of water is consumed and y is the amount of bread is consumed .Suppose this person's income is Rs.10 ,the unit price of bread is Rs. 3 and the unit price of water is Rs. 1 .The price of water incorporates a per unit subsidy of Rs.1 i.e for every unit of water consumed by the person ,she pays Re.1 to the water supplier .Suppose this person's demand is (x0 , y0 ).
13.Suppose the water subsidy is removed and she has to pay Rs.2 for each unit of water . Let (x1 , y1) be the new demand , what is the resulting change in this person's demand i.e (x1-x0 , y1-y0) ?
b.(-5/2 , 10/9 )
c.(-10/3 , 10/9 )
14.If the Gove provide this person a lumpsum income subsidy that exactly offsets her utility loss on account of removal of the water subsidy , then the required lumpsum subsidy is
15. The income effect of the removal of water subsidy is
a.(10+root(200)/4 , 10+root(200)/6 )
b.(10-root200/4 , 10-root(200)/6)
c.(-1/2 , -1/3 )
d.(5-root(200)/4 ,15 -root(200)/6 )
No.13 I have done.But I can not understand how to solve 14 and 15. Please explain...
so for ques 13 using these function you should get ans as (-5/2,0)
ques 14 take U* = xy (i),
where U* is level of utility derived by consuming x and y at price (p_x,P_y) = (1,3). so, find out its value.
now u have to derive that level of income for which u will get same utility at prices (2,3)
use the fact that MRS= price ratio (ii)
use (i) and (ii)
to find M' = 2x+3y
now calculate difference between M and M'
following these steps u will get ans as 200^1/2-10
ques 15 find out difference between demand at M and prices (2,3) and demand at M' and prices (2,3)
using this u should get (b) ((10-:200)/4, (10-:200)/6) as your ans
An analyst ,using a simple random sample ,obtained a 99%confidence interval for mean monthly family income , y with the following results :Rs. 3200<ybar< Rs .10000.If the analyst had used a 90% confidence interval instead ,then the interval would be :
a.Shorter and would involve a larger risk of being an incorrect interval estmate.
b.longer and would involve a smaller risk of being an incorrect interval estmate.
c.Shorter and would involve a smaller risk of being an incorrect interval estmate.
d.longer and would involve a longer risk of being an incorrect interval estmate.
I think ans. a. is correct. Is it true?? please reply..
30. The shift in the LM curve as a result of an increase in the money supply is :
a.equal to the increase in the moner supply.
b.exactly proportionate to the increase in the money supply.
c.less than proportionate to the increase in the money supply.
d.More than proportionate to the increase in the money supply.
Ans. let m=K(y) +l(r)
So ans is d. Is it correct??? please reply..
Lets see what is going on in this problem. Assuming linear LM schedule:
M = ky - hi, k>0 and h>0
can be rewritten as
y = M/k + hi/k
Clearly if you double the money supply the output less than doubles (at a fixed positive i)
Hence given the information that is provided in the problem, (c) seems to be the most appropriate choice. i.e. shift in the LM curve as a result of an increase in the money supply is less than proportionate to the increase in the money supply.
hi rishita can u pls tell me that which book has this type of topic and answers, i mean which books has solution of this question if u dont mind i m a new member and starting the self study so i really need help
Hello Sir, in this case can you please specify the equilibrium case? I haven't understood how P varies and how it changes the equilibrium employment. The labour demand curve is a horizontal line and varying P doesn't seem to change anything.