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MJRF 2022

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12 views4 pages

MJRF 2022

Uploaded by

kthesmart4
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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1. Answer the following questions.

[7 + 12 + 6 = 25]

(a) Suppose f : [0, 1] → [0, 1] and g : [0, 1] → [0, 1] are two


differentiable functions. Suppose f (x∗ ) = g(x∗ ) for some
x∗ ∈ (0, 1) and f (x) < g(x) for all x < x∗ . Which of the
following is true (explain your answer):
(i) f ′ (x∗ ) = g ′ (x∗ ); (ii) f ′ (x∗ ) > g ′ (x∗ ); (iii) f ′ (x∗ ) < g ′ (x∗ ).
Here, f ′ (x∗ ) and g ′ (x∗ ) indicates the derivative of f and g
resepctively at x∗ .
(b) Assume that f : [0, 1] → [0, 1] and g : [0, 1] → [0, 1]
are two continuously differentiable functions, i.e., differen-
tiable with continuous derivatives. Suppose f (x1 ) = g(x1 )
and f (x2 ) = g(x2 ) for some x1 < x2 . Show that there is
some x ∈ [x1 , x2 ] such that f ′ (x) = g ′ (x). Clearly give a
statement of the theorem you use to prove your result.
(c) Let f : [−1, 1] → R and g : [−1, 1] → R be two functions.
Suppose g is continuous and for all x ∈ [−1, 1], we have

f (x) = xg(x)

Prove that f is differentiable at 0.

1
2. There are n locations on a street (straight line) situated from
left to right as shown in Figure 1.

a1 a2 a3 ...... ...... an−2 an−1 an

Figure 1: Ordered locations on a street

Let A = {a1 , . . . , an } be the set of n ≥ 2 locations. A consumer’s


preference is a strict ordering of locations in A. Denote an
arbitrary preference by P and let ai P aj mean that ai is strictly
preferred by consumer than aj . The highest ranked location
according to any preference P is denoted by P (1). Answer the
following questions. [2 + 2 + 3 + 10 + 8 = 25]

(a) Suppose a consumer can have any possible preference over


A. How many preferences are possible for the consumer?
(b) A preference P is single peaked if for any ai , aj

• if ai is to the right of P (1) and aj is to the right of ai ,


then ai P aj
• if ai is to the left of P (1) and aj is to the left of ai ,
then ai P aj

i. Enumerate all single peaked preferences when


A = {a1 , a2 , a3 , a4 }.
ii. Suppose P is a single peaked preference over A and
P (1) = ak . What are the possible ranks of ak+1 ?
iii. Denote by C(x, y) = x!
y!(x−y)!
for any
non-negative integers x ≥ y. Show that the
number of single peaked preferences over A where top
ranked alternative is ak is C(n − 1, k − 1).
iv. Use these to show that the number of single peaked
preferences over A is 2n−1 .

2
3. Answer the following questions. [5 + 5 + 8 + 7 = 25]

(a) Suppose A and B are defined as


( )2
A = min 1 − x1 − 2x2
x1 ,x2 ∈R+
( )2
B = min 1 − y1 − 2y2 − 3y3
y1 ,y2 ,y3 ∈R+

Which of the following is true? (i) A = B (ii) A > B


(iii) A < B.
(b) Suppose f : [0, 1] → R is a differentiable function and let
x∗ ∈ (0, 1). Suppose x∗ satisfies the following property:
there exists a δ > 0 such that for all x ∈ (x∗ − δ, x∗ + δ) we
have f (x) ≤ f (x∗ ). Show that the derivative of f at x∗ is
zero.
(c) Suppose A is a convex set in Rn . A function f : A → R is
convex if for every x, y ∈ A and for every λ ∈ [0, 1],

f (λx + (1 − λ)y) ≤ λf (x) + (1 − λ)f (y)

Show that for each x1 , . . . , xm ∈ A (where m > 1) and for


∑
each λ1 , . . . , λm ∈ [0, 1] with mi=1 λi = 1, the following is
true:
(∑
m ) m
∑
f λi x i ≤ λi f (xi )
i=1 i=1

(d) Let F : [0, 1] → R be a strictly increasing


differentiable function with F (0) = 0 and F (1) = 1 Con-
sider the following optimization program.

max x(1 − F (x)) such that x ∈ [0, b]

where b ∈ (0, 1). Assume x(1 − F (x)) is strictly concave.


When does the optimal solution x∗ of this optimization
problem satisfy x∗ = b?

3
4. A pair of random variables X1 and X2 are jointly distributed
with the probability density

8x x if 0 ≤ x2 ≤ x1 ≤ 1
1 2
f (x1 , x2 ) =
0 otherwise

Answer the following questions. [5 + 5 + 5 + 5 + 5 = 25]

(a) Find the marginal density function of X1 .


(b) Find the marginal density function of X2 .
(c) Show that (marginal) distribution of X1 first-order
stochastic dominates distribution of X2 . In particular, if
F1 and F2 are marginal cumulative distribution functions
of X1 and X2 respectively, then show that F1 (x) ≤ F2 (x)
for all x ∈ [0, 1].
(d) Show that the expected value of X1 is no less than the
expected value of X2 .
(e) Let Y be the random variable defined by Y = F1 (X1 ).
Show that Y is uniformly distributed in [0, 1].

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