Microeconomics 2005 Paper: Answers/Hints/Solutions to Past Years Papers/Exam of Delhi School of Economics (DSE)

This is the second series of Microeconomics Questions asked in DSE

Microeconomics 2005

Ans 1 (d) (x1,y1) =(100,100) & (x2,y2)= (50,0) (Think, can this be a case of multiple competitive equilibrium?) (Here first two could be easily eliminated, but what about (c ) )

Ans 2 (a) (x1,y1) =(50,50) & (x2,y2)= (100,50) (What would be the pareto efficient points, will it be a diagonal line, a line from lower left origin to {100,100} point, or the portion of horizontal part of upper axis. Think!)

Ans 3 ( c) (Think why not b)

Ans 4 (b) (x1,y1) =(50,50) & (x2,y2)= (100,50) (Find out demand functions of agent 1 and 2, for both goods. D1 = {50,50}, D2: x2 Є {0,100}, y2 Є {0,100})

Ans 9 (a) {q1,q2} = {a/3b,a-3/3b}

Ans 10.(a) The market share of more efficient firm increases

Ans 11 (c ) q1 will increase and q2 will decrease. (What is this kind of market model called? {q1,q2} = {(a-ab-2b-1)/2b², (3ab-2b-a+1)/4b²} )

Ans 12. (d) Produce nothing in Plant 2

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