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A local golf course is considering lowering its fees in order to increase revenue coming in. Under what conditions is fee reduction going to achieve its goal?
Are price gouging laws an example of a price floor or a price ceiling? Does a binding price ceiling cause a shortage or a surplus?
Would you expect quarterly US real GDP series to be stationary? Why or why not?
Now regress S1 on s2. What does this regression connote? How does this exercise differ from the one we discussed in this chapter?
A priori, would you expect the two time series to be cointegrated? Why? What does trade theory have to say about the relationship between the two?
Suppose you want to forecast employment at the national level. Collect quarterly employment data and develop suitable forecasting model using ARIMA methodology.
Develop a suitable ARIMA model to forecast the labor force participation rate for females and males separately.
Collect data on housing starts and develop a suitable ARIMA model for forecasting housing starts. Explain the procedure step by step.
Suppose you find two cointegrating relationships. How do you interpret them? Would you have to include one or two error correction terms in estimating the VAR?
If you want to take into account some of these variables in the wage function, estimate your model, paying due attention to the problem of endogeneity.
State your reasons why you think that a standard logit or probit model is sufficient without resorting to IV estimation.
How would you use IV to obtain consistent estimates of the parameters of the two models? Show the necessary calculations.
What happens to price and quantity when supply and demand change at the same time?
Explain how the market works. In your explanation, be sure to illustrate how increasing global demand for oil has impacted the equilibrium price.
Which type of oligopoly behavior best explains this situation? Should it change the price it charges when its marginal costs change a little?
Describe what happens to your budget constraint if the price of one item in your budget becomes less expensive. Show this on a graph.
Draw Kate's budget constraint. If espresso goes on sale for $2 a cup, what does her new budget constraint look like?
Explain why many seniors often earn lower grades in their last semester before graduation. What is the opportunity cost of reading this textbook?
By referencing events in the news or something from your personal experiences, describe one example of each of the five foundations of economics.
Suppose you regress the log of the wage rate on the logs of education and experience. How would you interpret the slope coefficients in this regression?
Show the diagnostic tests you use. How would you resolve the problem of heteroscedasticity, if it is present in the model? Show the necessary calculations.
For the wage determination model discussed in the text, how would you find out if there are any outliers in the wage data?
How would you find out if the error variance is hetero scedastic? If your finding is in the affirmative, how would you resolve the problem?
What other variables do you think should be included in the wage determination model? How would that change the models discussed in the text?
How would you obtain the heteroscedastidty-corrected standard errors for the grouped logit?