Subject Code: PWE1A Paper: CES & Welfare economics Specific Instructions:

Answer all the four questions. Marks allotted 100. Each uestion carries equal !arks.

Word li!it is "#0$%00 words

General Instructions:
&he Student should sub!it this assi'n!ent in the handwritten for! (not in the t)*ed for!at+ &he Student should sub!it this assi'n!ent within the ti!e s*ecified b) the e,a! de*t Each uestion !entioned in this assi'n!ent should be answered within the word li!it s*ecified &he student should onl) use the -ule sheet *a*ers for answerin' the questions. &he student should attach this assi'n!ent *a*er with the answered *a*ers.

.ailure to co!*l) with the abo/e .i/e instructions would lead to rejection of assi'n!ent.

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Question No1 A. What assu!*tions are required for the two funda!ental theore!s of welfare econo!ics to hold0 Are these so stron' that the theore!s are de/oid of *ractical rele/ance0 1. What are the i!*lications of the funda!ental theore!s of welfare econo!ics for the or'ani2ation of an econo!)0 Question No2

3Pareto4s Princi*les states that there is an o*ti!al solution that cannot be i!*ro/ed u*on without disad/anta'in' at least one 'rou*5.E,*lain.Can )ou a**l) this *rinci*le in cor*orate decision !akin'0 6i/e an a**ro*riate e,a!*le fro! the *oint of /iew of a cor*oration.
Question No3

E,*lain the si!ultaneous 'eneral equilibriu! of *roduction and e,chan'e. Will it be *ossible to attain such equilibriu!0 When the *roduct !arket is characteri2ed b) !ono*ol) and the factor !arket b) !ono*ol).
Question No4

What is 7Co!*ensation test *rinci*le 70 Can this *rinci*le lead to a *arado,ical conclusion 0 8ow can )ou !ake this *rinci*le full *roof0 Wh) is the conclusion of this *rinci*le considered unethical0