(EYAX) = B_0+B_1) XU does not imply w ich of the following: Select one: O a. 1 unit increas of X changes the expected valu of Y by the amount of B, O b. the average valu of Y changes with X Oc. the equation is a population regression function O d. MY=B_0+B_1V X for all units in the population Clear my choice
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- Hhe paypil prbeluces. Drive the first orler Condition of Maximization for lutemediate gad with respect to Pel) Peti -MCttiAssume 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: BoGive typing answer with explanation and conclusion Suppose that the government must undertake an irreversible policy decision regarding the extent of air pollution regulation. The government is making this decision in a situation of uncertainty, however. In particular, there is some probability p that the benefits will remain the same as they are this year for all future years, but there is some probability 1 - p that benefits will be less in all future years. If we take into consideration the multiperiod aspects, should we err on the side of overregulation or underregulation, compared to what we would do in a single-period choice?
- Pisa Pizza, a seller of frozen pizza, is considering introducting a healthier version of its pizza that will be low in cholesterol and contain no trans fats. The firm expects that sales of new pizza will be $20 million per year. While many of these sales will be to new customers, Pisa Pizza estimaes that 40% will come from customers who switch to the new, healthier pizzai nstead of buying the original version. a) Assume cusotmer will spend the same amount on either version. What level of incremental sales is associated with introducing the new pizza? b) Suppose that 50% of hte cusomters who will switch from Pisa Pizza's orignial pizza to its healthier pizza will switch to another brand if Pisa PIzza does not introduce a healthier pizza. What level of incremental sales is associated with introducing the new pizza in this case?10 Suppose that in a particular state a standardized test is given to all graduating se- niors. Let score denote a student's score on the test. Someone discovers that perfor- mance on the test is related to the size of the student's graduating high school class. The relationship is quadratic: score = 45.6+ .082 class .000147 class², where class is the number of students in the graduating class. (i) How do you literally interpret the value 45.6 in the equation? By itself, is it of much interest? Explain. (ii) From the equation, what is the optimal size of the graduating class (the size that maximizes the test score)? (Round your answer to the nearest integer.) What is the highest achievable test score? (iii) Sketch a graph that illustrates your solution in part (ii). (iv) Does it seem likely that score and class would have a deterministic relationship? That is, is it realistic to think that once you know the size of a student's graduating class you know, with certainty, his or her test…Which one of the following statements is not true as OLS assumptions? O a. The variance of the residual can be nonconstant O b. The expected mean of the residual equals should be zero O c. The dependent variable should be a linear function of the independent variables O d. Values of the independent variables are fixed in repeated samples; most critical here is that the independent variables are not correlated with the residual
- 1- the locus of conditional means of Y fort he fixed values of X is the. Please select one; a) intercept line b) linear regression line c) population regression line d) conditional expectation function masnwer for 2.QUESTION 15 Suppose that if the null that alpha and beta both equal one is true a tost statistic you have calculated s dnitributed as an Fstatistic with 3 and 30 degroes of freedom for the numerator and denominator respectivoly What critical value cuts off 5% of the upper tal of this disitritution? OA.5.168 O B.9 277 OC8617 O D. None of the above
- Fiting a straight ine to a set of data yields the following predicion line. Complete (a) through (e) below a. Interpret the meaning of the Yintercept, Choose the correct anower below O A. The Yintercept, be =4, imples that the average value of Yis 4. OB. The Yintercept, b7, implies that when the value of Xs0, the mean value of Yis 7 OC. The Yantercept, by4, implies that tor each increase of 1 unt in X, the value ofYa expected to increase by 4 unts •D. The Yintercept, 4, implies that when the value of Xis 0, the mean value of Y is 4 b. Interpret the meaning of the slope, b Choose the comect answer below OA The slope, by4, implies that for each increase of 1 unit in X, the value of Yis expected to increase by 4 units OB. The slope, by =7, implies that the average value of Y is 7. O C. The slope, b,=7, imples that for each increase of 1 unit in X, the value of Y is expected to increase by 7 units %3D OD. The slope, b,7, implies that for each increase of 1 unit in X, the value of Yis…A farmer believes there is an equal chance that the next growing season will be abnormallyrainy. His expected return function has the formExpected return = 0.5lnYNR + 0.5lnYRwhere YNR and YR represent the farmer’s income in the states of “normal rain”and “rainy,” respectively.Suppose the farmer must choose between two crops that promise the following incomeprospects:Crop YNR YRMaize $14,000 $5,000Cotton $9,500 $7,500a) Which of the crops will he plant?b) Suppose the farmer can plant half his field with each crop. Would he choose to do so?Explain your result.c) What mix of Maize and Cotton would provide maximum expected utility to this farmer?d) Would Maize crop insurance, available to farmers who grow only Maize, which costs$2,000 and pays off $4,000 in the event of a rainy growing season, cause this farmer tochange what he plants?TRUE OR FALSE. When heterosdasticity is present OLS estimators are still BLUE.