7. In order to estimate the wage equation, individual's observed characteristics including years of schooling. In t...
7. In order to estimate the wage equation, individual's observed characteristics including years of schooling. In this problem, however, the error term contains unobserved characteristics such is likely that the error is correlated with the years of schooling, i.e., a highly motivated person tends to study more and also make more money. Choose the wrong statement an econometrician regresses the log of wage on motivation, and it as (a) The years of schooling is endogenous (b) The OLS estimator is still consistent and asymptotically normal (c) The OLS estimator is not unbiased (d) The IV estimator can be used to estimate the coefficients. (e) None of the above is wrong. 8. An econometrician regressed the hamburger sales on the hamburger price as the expenditure on advertising and its square. She obtained the following fitted regression equation well as Sales 109.719 7.640Price +12.151Advert 2.768Advert Economic theory says the firm should increase advertising expenditure to the point where an extra $1 of expenditure results in an extra $1 of sales (ie., marginal cost marginal revenue). Choose the wrong statement. (a) The term Advert captures some nonlinearity SC (b) This is an example of the (estimated) multivariate linear regression model. (c) The estimated marginal revenue is 12.151 +2(-2.768) Advert. (d) The estimated optimal level of advertising is approximately 2.014 (e) A t test can be used to test the hypothesis that advertising does not affect sales. The time series yt satisfies Ely <00 Var(y) a2< Cov( y-) ovariance depends on s, not t) Then, the series yt is sd to be (a) cross sectional data. (b) stationary (c) reliable (d) unreliae. (e) ne of the above.
7. In order to estimate the wage equation, individual's observed characteristics including years of schooling. In this problem, however, the error term contains unobserved characteristics such is likely that the error is correlated with the years of schooling, i.e., a highly motivated person tends to study more and also make more money. Choose the wrong statement an econometrician regresses the log of wage on motivation, and it as (a) The years of schooling is endogenous (b) The OLS estimator is still consistent and asymptotically normal (c) The OLS estimator is not unbiased (d) The IV estimator can be used to estimate the coefficients. (e) None of the above is wrong. 8. An econometrician regressed the hamburger sales on the hamburger price as the expenditure on advertising and its square. She obtained the following fitted regression equation well as Sales 109.719 7.640Price +12.151Advert 2.768Advert Economic theory says the firm should increase advertising expenditure to the point where an extra $1 of expenditure results in an extra $1 of sales (ie., marginal cost marginal revenue). Choose the wrong statement. (a) The term Advert captures some nonlinearity SC (b) This is an example of the (estimated) multivariate linear regression model. (c) The estimated marginal revenue is 12.151 +2(-2.768) Advert. (d) The estimated optimal level of advertising is approximately 2.014 (e) A t test can be used to test the hypothesis that advertising does not affect sales. The time series yt satisfies Ely