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Using the data on food in the Demand Functions data set, the following regressions were run, each with the logarithm of food as the dependent variable: (1) an OLS regression on a time trend T defined to be 1 in 1959, 2 in 1960, etc.; (2) an AR(1) regression using the same specification; and (3) an OLS regression on T and the logarithm of food lagged one time period, with the results shown in the table (standard errors in parentheses):
Discuss why each regression specification appears to be unsatisfactory. Explain why it was not possible to perform a common factor test.
Under pressure from apple growers, the government decides to put a per-unit subsidy the apple market that results in a new equilibrium quantity of 10 lbs of apples. A small country that currently does not trade with the world
The invers demand curve for a monopolist changes from P=100-2Q to P=120-2Q while the marginal cost of producing remains unchanged at a constant $20. what happens to the deadweight loss
She wants to mazimize the number of cusotmers served, given a fixed payroll. The following table shows how the toatl number of cusotmer served varies with the number of employees:Number of Employees High School Diploma(served) Bachelor's Degree(ser..
Max Whitley, manager of Whitley Construction, builds new homes in a booming community in the Midwest. Although the sales have slowed down because of a national recession, it now looks as if the recession is about to end. Max wants to be ready with..
Wilpen Corporation, a price-setting form, manufactures nearly 80% of all tennis balls purchased in the United States. Wilpen estimates the U.S. demand for its tennis balls by using the linear specifications:
Assuming you continue to earn $30,000 starting in period t 1, graph the value of your permanent income in each period, using equation (P1).
Test overall significance of the estimators testing null hypothesis that R&D intensity does not change with all regressors, against the alternative it does change with the regressors.,
Explain the term demerit goods and give examples of this and what are externalities? What are positive and negative externalities?
Suppose that the exchange rate between the Polish Zloty and the U.S. dollar is currently 4 Zls to the dollar. The one year forward rate for the Zloty is 4.5 Zls to the dollar
Estimate a logit model to predict delinquencies in terms of the other variables in the data set. Enter McFadden's Rsquared in the box below.
Suppose the government imposes new regulations that force tire manufacturers to adopt cleaner production methods that raise the production cost by $10 per tire. WILL THE NEW REGULATIONS RAISE THE PRICE OF TIRES CAREFULLY EXPLAIN WHY OR WHY NOT.
As the level of output increases, what happens to the difference between the value of average total cost and average variable cost? Decreases because average fixed cost decreases as output increases.
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