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Probelm:
(a) Differentiate between homoscedasticity and heteroscedasticity.
(b) Outline the reasons why the variances of disturbance term may vary.
(c) Given the 3 observations (1,4) , (2,6) and (3,7), with the true model being
Y = β1 + β2 X + u, solve the fitted line.
Explain the difference among the usual (product moment) correlation and rank correlation. In what situations is it more appropriate to use rank correlation?
David has £5000 that he wishes to save for six years. Bank A offers him an interest rate of 4% per annum compounded monthly. Bank B offers him an interest ra
The following table contains the ACT scores and the GPA (grade point average) for eight college students. Grade point average is based on a four-point scale and has been rounded to
You are considering a new line of consumer products. You expect revenues of $14 million in each of the next ten years, while expenses are half of revenues (all cash flows are assum
Given the demand function Qd = 650-5P-P2 where P=10 Find out the price elasticity of demand.
suppose only one professor teaches economics at your university, would you say that this prof is a monopolist who can exact any price from students in the form of readings assigned
How to test the linear regression?
(a) Explain what is meant by the term regression. (b) Describe the justification for the inclusion of a disturbance term in a regression analysis. (c) With appropriate exa
Peter's utility function is u(x, y) = x + 2y where x is the number of ounces of coffee and y is the quantity of sugar in grams. Let unit prices be given by P x = 6 cents, P
a) Design a simple econometric project to identify the factors that affect the demand for a good or service of your preference. Estimate the significance of these factors using mu
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