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a. Compute E(Y). b. The unemployment rate is the fraction of the labor force that is unemployed. Show that the unemployment rate is given by 1-E(Y). c. Calculate E(YX-1) and E(YX-0).

a. Compute E(Y). b. The unemployment rate is the fraction of the labor force that is unemployed. Show that the unemployment rate is given by 1-E(Y). c. Calculate E(YX-1) and E(YX-0).

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. The following table gives the joint probability distribution between employment status and college graduation among those either employed or looking for work (unemployed) in the working-age U.S. population for 2012. Joint Distribution of Employment Status and College Graduation in the U.S. Population Aged 25 and Older, 2012 Unemployed (Y-0) Employed (Y-1) Total 0.639 Non-college grads (X-0) 0.053 College grads (X-1) 0.015 Total 0.068 0.586 0.346 0.932 0.361 1.000 a. Compute E(Y). b. The unemployment rate is the fraction of the labor force that is unemployed. Show that the unemployment rate is given by 1-E(Y). c. Calculate E(YX-1) and E(YX-0). d. Calculate the unemployment rate for (1) college graduates and (ii) non-college graduates. e. A randomly selected member of this population reports being unemployed. What is the probability that this worker is a college graduate? A non-college graduate? f. Are educational achievement and employment status independent? Explain.
Transcribed Image Text:1. The following table gives the joint probability distribution between employment status and college graduation among those either employed or looking for work (unemployed) in the working-age U.S. population for 2012. Joint Distribution of Employment Status and College Graduation in the U.S. Population Aged 25 and Older, 2012 Unemployed (Y-0) Employed (Y-1) Total 0.639 Non-college grads (X-0) 0.053 College grads (X-1) 0.015 Total 0.068 0.586 0.346 0.932 0.361 1.000 a. Compute E(Y). b. The unemployment rate is the fraction of the labor force that is unemployed. Show that the unemployment rate is given by 1-E(Y). c. Calculate E(YX-1) and E(YX-0). d. Calculate the unemployment rate for (1) college graduates and (ii) non-college graduates. e. A randomly selected member of this population reports being unemployed. What is the probability that this worker is a college graduate? A non-college graduate? f. Are educational achievement and employment status independent? Explain.
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