An education economist estimated the wage equation to determine the rate of return to an additional year of education and obtained ln(WAGE) = -0.5220+0.1075×EDUC. it is anticipated that ability ( attributes, such as intelligence, creativity, perseverance and industriousness) is positively correlated with UDUC. If a measure of a bility is omitted from the model the estimated return to education A. Is biased downwards B. Is biased upwards C. Cannot be estimated D. All the above
Q: 2) Ben and Jerry make two types of ice cream: Chubby Hubby and Chunky Monkey. For each hour that Ben…
A: Introduction Production efficiency, as measured by some metric, is referred to as productivity.…
Q: Why is it important to be aware of economic issues?(Explain and give two examples). Discuss your…
A: Economics is a part of social science that involves the study of the manufacture, consumption, and…
Q: How do economists determine the optimal amount of pollution control?
A: In economics, marginal benefit and marginal cost are two important concepts, which determine the…
Q: The owner of a skating rink rents the rink for parties at $1200 if 60 or fewer skaters attend, so…
A: If 60 or fewer skaters attend Revenue = $1200 Price = $20 For each 5 skater above 60, price per…
Q: In a small open economy undertaking a fiscal contraction, the real interest rate should: rise…
A: Aggregate demand is the sum of consumption, investment, government spending and net export. IS…
Q: he generalized demand for Pepsi is Qd = 200- 20p + 5m +2pr and m=50 and pr=15. If the Qs = -40 +…
A: The Equilibrium is established where the demand and supply forces are equal. Change in the demand or…
Q: Perfection Corp earned $250 million before tax in 2022. Its combined Federal and State tax rate was…
A: Total Tax on earned income is given as = Tax on earned income + Tax on dividend income
Q: 15. Suppose you are hired by the MOH to study the determinants of child health. In addition to…
A: A dummy variable is a binary (0/1) variable used in statistical models to represent a categorical…
Q: Which of the following would be included in the gross domestic product (GDP) of the United States?…
A: Introduction GDP is a measure of the total value of products and services generated inside a…
Q: Consider an economy with 150M residents. Of the 150M people there are: 20M under 16 80M employed…
A: Unemployment rate is calculated as the unemployed people divided by the sun of employed and…
Q: Table. Sales per employee for the apparel and textile industries in the United States and China, as…
A: Table reflects that United States experiences an absolute advantage in all the products but has a…
Q: 3. What is an industrial district? How might governments of developing countries help them succeed?
A: The role of government in an economy is to provide a framework of laws, regulations, and…
Q: Assume a market for petroleum products, and let D denote the demand of petroleum products while MC…
A: Monopolist: A monopolist is a single seller in the market and hence he faces the downward sloping…
Q: Prices and wages are considered ‘sticky’ if: they do not fully adjust to changes in demand and…
A: Employment: Employment can be described as the state of working in compensation for payment at a…
Q: The diagram provides isoprofit and demand curves for a typical firm.
A: Isoprofit curve shows difference combinations of price and quantity that can generate same level of…
Q: If consumption in the United States is $10 trillion, investment $5 trillion, government purchases $4…
A: "GDP is also known as Gross Domestic Product. Gross domestic product measures the value of all the…
Q: 4.3 a. On a given evening, J. P. enjoys the consumption of cigars (c) and brandy (b) according to…
A: In economics, the term "utility" is used to define the value or worth of a good or service. Utility…
Q: You'd like to study social networks. Consider the following 7 people {A,B,C,D,E,F,G} in a social…
A: Formula for permutation is given as: nPr = n!/(n-r)!
Q: Graphically illustrate how the demand curve for electric vehicles will be affected in each of these…
A: The demand for an electric vehicle depends on the following variables: 1) Price of electric…
Q: 1. Find the number of boxes produced each week 2. Find the number of boxes lost during the given…
A: Here total production of boxes is the sum of 2 things 1) Delivered Boxes 2) Lost Boxes
Q: ng graph, plot the demand for laundry detergent using the blue point (circle symbol). Next, plot the…
A: The demand curve depicts the inverse relationship between price and quantity demanded, keeping other…
Q: Which of the following statements best describes the aggregate supply curve? : The aggregate…
A: Supply refers to the quantity of the good being produced and offered for sale by the producers at…
Q: Find the missing values for [ a ] through [ j ] below. [ j ] Which tax structure above is…
A: In a progressive tax structure, the tax rate increases as income increases. In a regressive tax…
Q: Discuss the direct and indirect effects of making public university education in the United States…
A: Education is the process of acquiring knowledge, skills, values, beliefs, and habits through formal…
Q: en years ago, the town of Easton decided to increase its annual spending on education so that its…
A: Introduction A population participating in a program (the treatment group) is compared to people not…
Q: Suppose the book-printing industry is competitive and begins in a long-run equilibrium. Then Hi-Tech…
A: In the short run, firms cannot enter or exit. This creates the possibility of earning supernormal…
Q: When the unemployment rate rose from 4.4% to 10.0% between 2007 and 2009, why was the unemployment…
A: Unemployment is defined as having the ability to work, actively looking for work, but being unable…
Q: Hacmillan Learning Christine and Paul are deciding how to split their time between writing music and…
A: A comparative advantage is the capacity to produce goods and services at a lower cost, without…
Q: A market contains the following demand and supply functions: Demand: P = 49 - 0.01Q Supply: P = 2…
A: Demand curve is the downward sloping curve Supply curve is the upward sloping curve. Equilibrium…
Q: Consider how an appreciation of the concept of opportunity cost may be of use in explaining why it…
A: Outsourcing refers to the process where a company hires a party outside the company to carry out…
Q: Germany allows firms to choose the depreciation method(s) of: straight-line method…
A: Depreciation is the methodical distribution of an asset's cost that is over the course of its useful…
Q: The researcher always has the final word on whether and how long to retain any data collected during…
A: It depends on the specific context and regulations. In some cases, the researcher may have the final…
Q: 2. Alice maximizes expected utility with an index u(x) √x where x is the total annual income. Her…
A: In certainty equivalence the preference of the consumer is an assured amount rather a higher return…
Q: he city government is considering two tax proposals: • A lump-sum tax of $300 on each producer of…
A: Lump-Sum Tax versus Per Unit Tax: The lump-sum tax does not affect the equilibrium quantity because…
Q: (a) Solve the firm's maximization problem and derive the labour demand curve. (b) Graph the labour…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: Q2a) Employ the circular flow of income model to measure GDP of a hypothetical economy.
A: The Circular flow diagram is used to illustrate the flow of spending and money in the economy.
Q: Briefly explain one advantage for each of the two Repo-Deal contract partners. Compare the costs…
A: A Repo-Deal (short for "repurchase agreement") is a short-term secured loan that is used to finance…
Q: What was Saudi Arabia’s GDP in 2022?
A: Gross Domestic Product: It is the market value and aggregate money of the services produced and…
Q: The following (enter all values as integers). a. The deadweight loss is $ b. The transfer of…
A: As per economics, deadweight loss is the difference in production and consumption of any given good…
Q: The owner of an apartment building can rent all 60 apartments if she charges $1,600 per month, but…
A: Since you have posted multiple questions, we will provide the solution only to the first question as…
Q: Musashi's Juice Bar has the following cost schedules: In the following table, complete the marginal…
A: Cost is often the outlay made for producing a good or service that a business sells. The price of…
Q: Problem 4.5. Consider the (utility) maximization problem subject to the (budget) constraint max ln…
A: Given information Max U=lnC1+βlnC2Budget constraintC1+11+RC2=WC1---- consumption in period 1C2----…
Q: Which of the following is more likely to be effective in increasing the growth rate of real GDP?…
A: Aggregate demand is the sum of consumption, investment, government spending and net export. The…
Q: 3) Now suppose you have $500 to spend. You can buy computer software, which costs $50 or go on a ski…
A: Budget set: The budget set signifies all the quantity sets of goods that can be purchased with the…
Q: How do you find the marginal costs (questions d and e)
A: The production possibility curve depicts the combination of two goods that can be produced by using…
Q: During its acquisition, a machine was bought for P150,000. After 12 years of life, its salvage value…
A: Depreciation is the decrease in the value of asset due to normal wear and tear of the machine.…
Q: The marginal social cost is equal to marginal private cost + demand marginal external cost +…
A: Externality is an economic term that is used to indicate the expenditure related or benefits…
Q: Suppose a consumer consumes two goods, x and y and has utility function U(x, y) = min{3x, 2y}. She…
A: Given information: U= min{3x,2y} -----------> Utility function The price of x is $35 => Px =…
Q: When a good gets better from one year to the next, the CPI has a what is called O quality change…
A: The consumer price index (CPI) measures the average change in the cost of the market baskets…
Q: 4. In the short run, which of the following costs for StayFresh Bakery Company are likely to be…
A: Fixed costs are expenses that do not change with changes in the level of production, whereas…
23. An education economist estimated the wage equation to determine the
A. Is biased downwards
B. Is biased upwards
C. Cannot be estimated
D. All the above
Step by step
Solved in 2 steps
- Consider the following regression estimates (ID6) Source Model Residual Total wage educ exper exper2 _cons inverse u-shaped SS C. linear d. exponential 1927.87673 5232.53756 7160.41429 df -.0046123 -3.96489 642.625576 3 522 10.0240183 525 Coef. Std. Err. .5953429 .0530251 .268287 .0368969 .000822 .7521526 MS 13.6388844 Number of obs F(3, 522) Prob > F R-squared Adj R-squared Root MSE t P>|t| 0.000 11.23 7.27 0.000 -5.61 0.000 -5.27 0.000 = .4911741 .1958023 -.006227 -5.442508 = = = 526 64.11 0.0000 0.2692 0.2650 3.1661 [95% Conf. Interval] .6995118 .3407717 where wage is hourly wage in US$, educ is years of education, exper is years of work experience and exper2 is experience squared (exper* exper). According to these estimates, what is the functional form of the relationship between experience and predicted wage when we hold education constant? a. u-shaped b.i -.0029975 -2.487272Consider the following regression estimates (FN2) Linear regression belavg abvavg female married _cons b. 1 wage O C. 5 O d. 4 Robust Coef. Std. Err. 3047845 3150202 2820787 -1.063254 .0693348 -2.751963 .9686236 .2612646 6.699098 .2889831 Number of obs F(4, 1255) Prob > F R-squared Root MSE t P>|t| -3.49 0.001 0.22 0.826 -9.76 0.000 3.71 0.000 23.18 0.000 |||||||||| = = .45606 6.132155 = -1.661197 -.5486894 -3.305361 = = [95% Conf. Interval] 1,260 56.35 0.0000 0.1121 4.3987 assume that MLR 1-6 hold. In the regression above, how many coefficients (including the constant) are statistically significant at the 1% level? a. 3 -.4653108 .687359 -2.198565 1.481187 7.266042In this question we look at the relation between the logarithm of weakly earnings and years of education. Using data from the national longitudinal study of youth, we find the following results for a regression of log weekly earnings and years of education, experience, experience squared and an intercept: Log (earnings) = 4.016 + 0.092 . educi + 0.079 .expei + 0.002 . experi 2 ( 0.222) ( 0.008) ( 0.025) (0.001) c). Labour economist studying the relation between education and earnings are often concerned about what they call “ability bias”. Suppose that individuals differ in ability, and that the correct specification of the regression function is one that includes ability: log ( earnings )I = β1 + β 2 ⋅ educI + β 3 ⋅ experI − β 4 ⋅ experI2 + β5 ⋅ abilityI + εI . In this regression, what do you expect the sign of β5 (the coefficient on ability) to be?
- With respect to a given product, describe the connection that exists between equalibrium/disequalibrium and prediction. cite an unique exampleThe following equation has been used to estimate wages: ln (Y) = ln (Yo) + b2EDU + b3 EXPER + b4 EXPER2 + e where Y is income, Y0 is income of someone with no education or experience, EDU is years of education and EXPER is experience in the field. If you suspect males earn higher wages than females and that the wage difference increases with education how would you adjust the econometric model to estimate wages? OPTIONS - a. include a binary variable for gender, MALE b. include an interaction term equal to MALE* EDUC c. include an indicator variable for MALE and one for FEMALE d. include a binary variable for MALE and an interaction term equal to MALE * EDUCAssume that the dummy variables Marriedal if married (0 if not married), Sex=1if male (0 if female), and that you estimate the equation: loglwage) le + B,'Married + B'Sex + B,(Married Sex). The estimated log wage for an unmarried woman can be estimated by: Bo
- Compute the R² using the following information. What does this number mean? Wage = 4.43 +0.61Edu + e n = 1089, SST = 37211.6, SSE 37211.6, SSE 19848.2 R² = = = 0.4666. 46.66% of the variation in wage can be explained by education. R² = 0.5334. 53.34% of the variation in wage can be explained by education. R² = 0.61.61% of the variation in wage can be - explained by education. R² = 0.3043. 30.43% of the variation in wage can be explained by education.Candy is a Year 4 full-time undergraduate student majoring in marketing at a private university in Hong Kong and she is going to be graduated after the summer break. She has collected some data from the Student Careers and Affairs Office (SCAO) related to her job planning. According to the graduate employment surveys conducted for the last two years by the private university, the average salary earned by the graduates of her programme is constant at around $14,000. Actually, Candy is quite disappointed. In view of this, Candy is considering to participate in an one-year internship program launched by the SCAO after her graduation. In other words, she would enter the job market “formally” one year later if she joins the internship program. Finally, with the help of the SCAO, she could get an internship offer from a famous marketing company in Hong Kong. The monthly salary provided by the company is $12,000 while a good reference letter would be prepared for the interns completing the…13. Collinearity in a multiple regression analysis Suppose you want to examine the effects of a training program on future earnings using the following model: earn98= 4.64 +2.376train +0.371earn96 +0.366educ- 1.86 age +2.534 married (1.14) (0.43) (0.016) (0.062) (0.013) (0.4) where earn 98- 1998 earnings, in thousands of dollars train -1 if the individual participated in the training program, and =0 otherwise earn 96- 1996 earnings, in thousands of dollars educ years of education age = age, in years married-1 if the individual is married, and -0 otherwise Suppose that there is a high degree of correlation (but not perfect) between earnings in 1996, education, age, and marital status. True or False: We should be concerned about this high degree of correlation because it affects our ability to reliably estimate the impact of the training program on 1998 earnings, T. True False
- Candy is a Year 4 full-time undergraduate student majoring in marketing at a private university in Hong Kong and she is going to be graduated after the summer break. She has collected some data from the Student Careers and Affairs Office (SCAO) related to her job planning. According to the graduate employment surveys conducted for the last two years by the private university, the average salary earned by the graduates of her programme is constant at around $14,000. Actually, Candy is quite disappointed. In view of this, Candy is considering to participate in an one-year internship program launched by the SCAO after her graduation. In other words, she would enter the job market “formally” one year later if she joins the internship program. Finally, with the help of the SCAO, she could get an internship offer from a famous marketing company in Hong Kong. The monthly salary provided by the company is $12,000 while a good reference letter would be prepared for the interns completing the…Suppose the researcher considers the following model : Wage = Bo+B,Female + u, and runs OLS, using wage data on 250 randomly selected male workers and 280 female workers. The researcher has obtained the estimated equation as Wage = 15 (1.00) 3 Female, R = 0.05. (0.5) In the equation, Wage is measured in dollars per hour, Female is a binary variable that is equal to 1 if the person is a female and O if the person is a male. The numbers in the parentheses are the standard errors of the coefficients. Which Statement is NOT correct? The coefficient of Female, -3.00, is statistically significant at 5%. O The p-value for the test that Ho: B = 0, H : B 0 is less than 0.05. This regression may suffer omitted variable bias. R Since insignificant. is too low, the wage difference between men and women is The researcher can increase R- by including more regressors in the model.Suppose that a researcher, using wage per hour data on 250 randomly selected male workers and 280 female workers, estimates the following OLS regression wage - 12.68+2.79xMale (0.18) (0.84) R = 0.06, s-3.10 where Male is a dummy variable that takes the value 1 if the worker is male and 0 if female: s represents the standard error of the regression and in brackets homoskedastic std errors are reported. The researcher wants to find the gender pay gap as percentage bf the wagé per hour of women. According to this information the gender pay gap on average against women is approximately -22% -25% -38% O-16%