Programme Code : MEC
Course Code : MEC-001
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Year : 2012 Views: 1473 Submitted By : Ijtaba Hussain On 23rd December, 2012

Do you have solution for this Question. If yes    I aslo want solution.

Q.


equilibrium a Nash equilibrium? What do you understand by subgame-perfect

equilibrium?

2) What is indirect utility function? Given a direct utility function, how will you derive the indirect utility

function? Explain Roy’s identity.

Section B

3) Derive the elasticity of substitution for the Cobb-Douglas production function q ï½ f ï¨K, Lï© ï½ AKaL1ï­a

4) What is meant by externalities? How can the problem of externalities be solved? Explain the Coase’s

Theorem.

5) Explain Arrow’s Impossibility Theorem, giving the various assumptions.

6) What is meant by asymmetric information? In what way does the presence of asymmetric information

lead to a departure from the usual competitive equilibrium? Explain the relation among moral hazard,

adverse selection and signaling, giving suitable examples.

7) What do you understand by actuarially fair insurance? Do you agree with the proposition that a riskaverse

person will optimally buy full insurance if the insurance is actuarially fair? Give reasons in support

of your answer.


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