y = B1 + B2x2 + 81D1 +82D2 + √3D3 + e The above model is fitted to model wage (y) against the years of education (x2). The dummy variable D1 takes 1 for male; 0 for female. The dummy variable D2 takes 1 for having children; 0 for having no children. The dummy variable D3 takes 1 for having PhD degree; 0 for having not having PhD degrees. Which coefficient measures the expected wage of female with no children and no PhD degree wižen x2=0? Select one: O a. 63 O b. 82 OC. B1 O d. 61

y = B1 + B2x2 + 81D1 +82D2 + √3D3 + e The above model is fitted to model wage (y) against the years of education (x2). The dummy variable D1 takes 1 for male; 0 for female. The dummy variable D2 takes 1 for having children; 0 for having no children. The dummy variable D3 takes 1 for having PhD degree; 0 for having not having PhD degrees. Which coefficient measures the expected wage of female with no children and no PhD degree wižen x2=0? Select one: O a. 63 O b. 82 OC. B1 O d. 61

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the population regression of log earnings [Y;, where Y,= In(Earnings,;)] against two binary variables: whether a worker is married (D₁, where D₁;= 1 if the th person is married) and the worker's gender (D2;, where D₂;= 1 if the th person is female), and the product of the two binary variables Y₁ = Po+B₁D₁+P₂D2i + P3 (D₁¡ × D₂i) + Hi- The interaction term: O A. indicates the effect of being married on log earnings. B. does not make sense since it could be zero for married males. C. allows the population effect on log earnings of being married to depend on gender. D. cannot be estimated without the presence of a continuous variable.
The model initial setup is• The number of vacancies posted in the economy during a particular month is v = 100.• There were initially u = 225 unemployed workers at the beginning of the month.• Suppose that the average wage is 0.6 relative to their productivity. Unemployed workersreceive benefits that are half the wage, i.e., b = 0.3 relative to productivity.• Suppose that the number of matches between firms and workers are given by thefollowing matching functionsM = Au^0.5v^0.5• Suppose that 45 workers were able to find a job by the end of the month.Answer the following questions.a) What is the monthly job finding rate?b) What is the probability that an average vacancy is filled in a month?c) What is the job creation cost, k?d) What is the value of A?e) Explain how introducing a searching cost to this model would affect the queue length,the number of vacancy and unemployment rate, and wage.
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