1 13. For each of the following issues explain the problem for OLS and give a solution.a) E(u²)=o¹Z₁b) The true model is given by Y=Bo+B₂X+B₂Z+u, but you don't have any data on Z.c) The true model is given by Y=Bo+B1₁X₁+B₂Z₁+u, and X=C₁+CY₁+C₁Q+e;d) Your dependent variable is Y=1 if you get an A in econometrics and =0 otherwise

Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

13. For each of the following issues explain the problem a) E(u²)=o¹Z₁ b) The true model is given by Y=Bo+B₁X+B₂Z₁+u, but you don't have any data on Z. c) The true model is given by Y=Bo+B₁X+B₂Z+u, and X-C₁+CY+CQ+e give a solution.

13. For each of the following issues explain the problem a) E(u²)=o¹Z₁ b) The true model is given by Y=Bo+B₁X+B₂Z₁+u, but you don't have any data on Z. c) The true model is given by Y=Bo+B₁X+B₂Z+u, and X-C₁+CY+CQ+e give a solution.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 1.4CE

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Question

13. For each of the following issues explain the problem for OLS and give a solution.
a) E(u²)=o¹Z₁
b) The true model is given by Y=Bo+B₂X+B₂Z+u, but you don't have any data on Z.
c) The true model is given by Y=Bo+B1₁X₁+B₂Z₁+u, and X=C₁+CY₁+C₁Q+e;
d) Your dependent variable is Y=1 if you get an A in econometrics and =0 otherwise

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