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5.We are usually worried about ability bias when estimating returns to education. Are the following candidates valid instruments? Why or why not?
(a) Distance of parents' home to college.
(b) Parental education.
(c) Regional differences in compulsory schooling age.
Consider a linear city Hotelling model. There are two firms, A and B, located at the (30) ends of the product space. The length of the product space is 3 and transportation costs are 1 times the distance traveled.
a manufacturer of small hydraulic turbine has the annual cost data given below. calculate the manufacturing cost and the selling price for turbine. raw material and components cost 2150000 direct labor 950000 direct expense 60000 plant manager and st..
The population of an isolated island consists of 10 people. In oneyear, each person can either pick 100 bunches of bananas or,alternatively, tend an oven that bakes bananas into banana bread.There is only one oven on the island.
Your firm's the production function: Q = 4K^1/2L^1/2 Suppose that the price of labor is $5 and the price of capital is $20. Your firm desires to produce 200 units of output. How much labor will be hired to minimize the costs of producing 200 units..
What are the impact and long-run propensities and explain the nature of potential multicollinearity in the explanatory variables when data for marriage and income is observed each month.
The mayor considers engaging in direct quantity regulation (also called "command- and-control") and declares that each firm must engage in 42.5 units of pollution abate- ment. If the plants are controlled by the same firm, would it be socially optima..
Mr. Consumer has an income of $100, and his utility is unaffected by the seasons. In January, he spends his whole income on two goods, Food and Clothing. The price of food is $2 and the price of clothing is $1 in January.
Wildcat Co. has to decide whether or not to drill an oil well. It has $100 current income. Drilling would cost $100; if oil were struck, the company would receive $200 for the oil. If the field is dry, nothing is recovered.
Susanna Nanna is the production manager for a furniture manufacturing company. The company produces tables (X) and chairs (Y). Each table generates a profit of $80 and requires 3 hours of assembly time and 4 hours of finishing time. Each chair gen..
The Third National Bank has reserves of $20,000 and checkable depositts of $100,000. The reserve ration is 20%. Households deposit $5,000 in currency into the bank that is added to reserves
Assume a firm wants to minimize its cost of producing y amount using x1 and x2 as inputs, which means it wants to minimize w1x1 + w2x2 subject to x1^(1/2)x2^(1/2)= y: (a) Using Lagrange multiplier method, find optimal x1 and x2 as functions of w1,w2 ..
If one country has a corporate income tax of 20% and a second country has a corporate income tax rate of 15%, what can you expect to occur a. Now suppose the country with a corporate income tax rate of 20% lowers its rate to 9.5% five years later.
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