Which of the following statements about the inclusion of dummy variables in econometric equations is false? O a. The dependent variable on the left side of an equation can be a dummy variable O b. An equation can have both a slope dummy and an intercept dummy on the right hand side O c.If there is a dummy variable as the dependent variable on the left side of an equation, intercept dummy cannot be placed as the explanatory variable on the right side; only a slope dummy can be placed on the right side Od. If there isa dummy variable as the dependent variable on the left side of an equation, both the intercept and the slope dummy can be placed as the explanatory variable on the right side

Which of the following statements about the inclusion of dummy variables in econometric equations is false? O a. The dependent variable on the left side of an equation can be a dummy variable O b. An equation can have both a slope dummy and an intercept dummy on the right hand side O c.If there is a dummy variable as the dependent variable on the left side of an equation, intercept dummy cannot be placed as the explanatory variable on the right side; only a slope dummy can be placed on the right side Od. If there isa dummy variable as the dependent variable on the left side of an equation, both the intercept and the slope dummy can be placed as the explanatory variable on the right side

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter2: Mathematics For Microeconomics

Section: Chapter Questions

Problem 2.16P

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2. Supose that a consumer has utility function U with U (₁,22) = x1426, where ₁ and ₂ are demand of commodity 1 and 2. Suppose that the price of commodity 1 and 2 is $3 and $5, respectively. This consumer has money m = 12 to spend and wants to maximize utility with constraint the money. (a) Write the Lagrangian function. (b) Find the critical point using first order condition. (c) Find the Hessian matrix to check whether the critical point is maximiser or minimiser. (d) Find the maximum utility.
Ewa spends all her 600 PLN bonus on the purchase of sweets and cosmetics. Draw the Ewa's budget line, knowing that her favorite sweets cost PLN 10 per pack and the price of cosmetics is PLN 25. •How will Ewa's situation be affected by the PLN 50 bonus increase? •What will happen if the price of cosmetics increases to PLN 30? •How, from the point of view of initial situation, we will evaluate the following quantitative combinations: –30 packages of sweets and 15 cosmetics –60 packages of sweets and 24 cosmetics –20 packages of sweets and 10 cosmetics –10 packages of sweets and 15 cosmetics
Title Suppose that Lynn enjoys coconut oil in her coffee. She has very particular preferences, and she mus Description Suppose that Lynn enjoys coconut oil in her coffee. She has very particular preferences, and she must have exactly two spoonfuls of coconut oil for each cup of coffee. Let C be the number of cups of coffee, and O be the number of spoonfuls of coconut oil. Also, let PC be the price of a cup of coffee. Suppose Lynn has $12 to spend on coffee and coconut oil. Also, the price of coconut oil is $.50 per spoonful.a) Graph Lynnâs Price Consumption Curve for prices, PC = $1, PC = $2, and PC = $3. Please put the number of cups of coffee on the horizontal axis, and the number of spoonfuls of coconut oil on the vertical axis. Be sure to label your graph carefully and accurately.b) Graph Lynnâs demand curve for coffee. You may assume that both coconut oil and coffee are continuous variables so she can consume any amount of coffee and coconut oil that she could afford.…
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Consider a utility maximizing consumer who generates utility according to the following 1 utility function: U=Vx +y where x is the quantity of x consumed and y is the quantity 2 of y consumed. Let the price of x, price of y and income be noted as p, Py, and M, respectively. Set up the utility maximizing Lagrangian and derive the Marshallian demand functions. a Explain the difference in what we is being tested when we check the first order conditions and the second order conditions for a maximum (intuitively, not just the math). Derive the indirect utility function and the expenditure function. Derive the Hicksian demand equations without going through the expenditure minimization process. b. C. d. Let income = $8, p,=$.25 and p,=$1. What are the quantity demanded of x, and у? Draw the consumer choice graph and illustrate the situation in part e. Use the E. х, %3D f. graph to illustrate the income and substitution effect stemming from a change in the price of x to $.50. Use the actual…
11 Suppose that a researcher, by using a sample of transactions of residential houses, wants to estimate how the price of the houses is affected by the presence of an elevator in the building. To this end, he regresses the price of the house in thousands euro, price, on the dummy elevator indicating the presence of the elevator (dummy equal to 1) or not (dummy equal to 0): on ta price; = a0 +a1 elevator; + u; o max.: The OLS estimates are (standard errors in round brackets below the corresponding coefficient): rassegna = 53.802 + 73.068 elevator; (19.256) price; R2 = 0.036 (10.735) A 95% confidence interval for the coefficient of elevator, assuming the 3 OLS assumptions hold, would be: O (a) [52.03; 94.11] O (b) [49.34; 96.79] O (c) [55.46; 90.67] O (d) [55.46; 96.79] Precedente Successivo
. On a given evening, J. P. enjoys the consumption of cigars (c) and brandy (b) according to thefunctionU (c, b) = 20c - c2 +18b- 3b2.How many cigars and glasses of brandy does he consume during an evening? (Cost is no objectto J. P.)b. Lately, however, J. P. has been advised by his doctors that he should limit the sum of glasses ofbrandy and cigars consumed to 5. How many glasses of brandy and cigars will he consumeunder these circumstances?
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on If g(x)=2x3-4x. What is the value of its slope when x = -2? A. 8 C. 20 B. 2 D.-8 Select one: O C OB OD O A