XtremePapers

Ill tell the ans first and then logic. so tell if i am correct
Q8 C
Q.30 C

V33
Q.8 B

V32 Q30 B Q8 correct
V33 8A

i figured da V32 Q30 , both da changes are happenin in Y1 , so saing dec in Y1 , but in Y2 tngs get back to normal ,so inc in savings in Y2

V33 use som of ur maths man , i hav no idea hw Q8 is A , i guess som gradient tng , not sure tho

yes .. in first year people will save expecting tax rates to rise next year.. so save and then eat on their savings..
For Q.8 see V.32
when you move from OQ2 to OQ3 corresponding change in cost is less compared to change in output therefore AVC will fall.. AVC = costs/output

ah the curve is bendin downward datz y ? btw V33 Q8

*bendin downward from OQ2 to OQ3

Again in V33 Q.8 see when moving from OQ2 to OQ3 rise in corresponding costs is less thereby reducing ATC lesser..
howevr C is not ryt ansewr coz see corresponding rise in costs when moving OQ1 to OQ2 is less per unit output when comparing it to rise in cost per unit output when moving from OQ2 to OQ3 .. therefore AVC would not be at min at OQ3 it would be at min at OQ2 xD its confusing ryt..

draw horizontal lines at OQ2 and OQ3.. u ll see rise in costs to b less than output

haha ya man damn confusin btw OQ1 to OQ2 is higher ryt ? the slope is upward

drawin horizontal lines at OQ2 and OQ3 , and findin da gradient by usin som assumed value ryt ? i forgot most of my maths -_-

slope is always upward.. OQ1-OQ2 cost rise is lower because slope is decreasing

yu can visually see that slopeis increasing or decreasin..

if u assume values then make sure yu take appropriate values

ah that means we hav to just draw horizontal line n check if slope is inc or dec , but y nt da AVC ? damn confusin sum :/

how do we know if its AVC or ATC which is decreasiin ?

ooohh i thnk i got it wait..

hope these kind of Qstion wont cm fr us

seee they have mad the dotted lines..
in V32 look at the lines.. see the gradient of lines through origin gives ATC and gradient of dotted lines starting form above origin gives AVC ..
now see gradient of line decreases as it goes from OQ1 to OQ2 and to OQ3.. So ATC is minimised at OQ3 (no option)
now see they have made a dotted line at from above orgin to OQ3.

Draw lines from that point to OQ1 and OQ2 .. yuull see that gradient of line to OQ3 is less than compared to OQ1 and OQ2 therefore AVC minimum at OQ3