The appropriate principle of individual choice used. Concept Introduction: Principles of Individual Choice: “Choice is necessary because resources are scarce”- Resources are always scarce in respect to its use, a single resource can be put to various alternative uses. Therefore, one has to choose between the various uses. “The true cost of something is its opportunity cost ”- The value of any commodity is derived from the forgone cost to get that particular commodity. “How much is the decision at the margin”- The choice of having something depends on the benefits one receive from that choice. “People usually exploit opportunities to make them better off”- People are always fond of alternative incentive, which can make them in better situation as compared to the previous situation. “ Gains from trade ”- Individual always gain from trade by selling the product in which they are specialized and purchasing the product in which they are comparatively less specialized. “Market moves towards equilibrium”- Market always tries to settle down at a point where no individual is comparatively better off in changing his choice. “Resources should be used efficiently to achieve society’s goals”- Resources should be used in such a way that will not make any better off by making the other individual worse off. “Markets usually lead to efficiency”- People always look for the opportunity, which can make them better off without making any other person worse off, this leads to efficiency in the market. “When markets don’t achieve efficiency, government intervention can improve society’s welfare”- Government intervention is required when the market do not correct itself. “One person’s spending is another person’s income”- The economy will always go on because a person earns only when the other person spends. “Overall spending sometimes gets out of line with the economy’s productive capacity”- The economy can face inflation at the time when spending of whole economy raises all together. “Government policies can change spending”- Various fiscal and monetary policies of government are used to correct the situation of the economy and adjust the spending.

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Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 1, Problem 1P

To determine

The appropriate principle of individual choice used.

Concept Introduction:

Principles of Individual Choice:

“Choice is necessary because resources are scarce”- Resources are always scarce in respect to its use, a single resource can be put to various alternative uses. Therefore, one has to choose between the various uses.

“The true cost of something is its opportunity cost”- The value of any commodity is derived from the forgone cost to get that particular commodity.

“How much is the decision at the margin”- The choice of having something depends on the benefits one receive from that choice.

“People usually exploit opportunities to make them better off”- People are always fond of alternative incentive, which can make them in better situation as compared to the previous situation.

“Gains from trade”- Individual always gain from trade by selling the product in which they are specialized and purchasing the product in which they are comparatively less specialized.

“Market moves towards equilibrium”- Market always tries to settle down at a point where no individual is comparatively better off in changing his choice.

“Resources should be used efficiently to achieve society’s goals”- Resources should be used in such a way that will not make any better off by making the other individual worse off.

“Markets usually lead to efficiency”- People always look for the opportunity, which can make them better off without making any other person worse off, this leads to efficiency in the market.

“When markets don’t achieve efficiency, government intervention can improve society’s welfare”- Government intervention is required when the market do not correct itself.

“One person’s spending is another person’s income”- The economy will always go on because a person earns only when the other person spends.

“Overall spending sometimes gets out of line with the economy’s productive capacity”- The economy can face inflation at the time when spending of whole economy raises all together.

“Government policies can change spending”- Various fiscal and monetary policies of government are used to correct the situation of the economy and adjust the spending.

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Suppose that a random sample of 216 twenty-year-old men is selected from a population and that their heights and weights are recorded. A regression of weight on height yields Weight = (-107.3628) + 4.2552 x Height, R2 = 0.875, SER = 11.0160 (2.3220) (0.3348) where Weight is measured in pounds and Height is measured in inches. A man has a late growth spurt and grows 1.6200 inches over the course of a year. Construct a confidence interval of 90% for the person's weight gain. The 90% confidence interval for the person's weight gain is ( ☐ ☐) (in pounds). (Round your responses to two decimal places.)

Suppose that (Y, X) satisfy the assumptions specified here. A random sample of n = 498 is drawn and yields Ŷ= 6.47 + 5.66X, R2 = 0.83, SER = 5.3 (3.7) (3.4) Where the numbers in parentheses are the standard errors of the estimated coefficients B₁ = 6.47 and B₁ = 5.66 respectively. Suppose you wanted to test that B₁ is zero at the 5% level. That is, Ho: B₁ = 0 vs. H₁: B₁ #0 Report the t-statistic and p-value for this test. Definition The t-statistic is (Round your response to two decimal places) ☑ The Least Squares Assumptions Y=Bo+B₁X+u, i = 1,..., n, where 1. The error term u; has conditional mean zero given X;: E (u;|X;) = 0; 2. (Y;, X¡), i = 1,..., n, are independent and identically distributed (i.i.d.) draws from i their joint distribution; and 3. Large outliers are unlikely: X; and Y, have nonzero finite fourth moments.

Answer 2

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Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 1, Problem 1P

To determine

The appropriate principle of individual choice used.

Concept Introduction:

Principles of Individual Choice:

“Choice is necessary because resources are scarce”- Resources are always scarce in respect to its use, a single resource can be put to various alternative uses. Therefore, one has to choose between the various uses.

“The true cost of something is its opportunity cost”- The value of any commodity is derived from the forgone cost to get that particular commodity.

“How much is the decision at the margin”- The choice of having something depends on the benefits one receive from that choice.

“People usually exploit opportunities to make them better off”- People are always fond of alternative incentive, which can make them in better situation as compared to the previous situation.

“Gains from trade”- Individual always gain from trade by selling the product in which they are specialized and purchasing the product in which they are comparatively less specialized.

“Market moves towards equilibrium”- Market always tries to settle down at a point where no individual is comparatively better off in changing his choice.

“Resources should be used efficiently to achieve society’s goals”- Resources should be used in such a way that will not make any better off by making the other individual worse off.

“Markets usually lead to efficiency”- People always look for the opportunity, which can make them better off without making any other person worse off, this leads to efficiency in the market.

“When markets don’t achieve efficiency, government intervention can improve society’s welfare”- Government intervention is required when the market do not correct itself.

“One person’s spending is another person’s income”- The economy will always go on because a person earns only when the other person spends.

“Overall spending sometimes gets out of line with the economy’s productive capacity”- The economy can face inflation at the time when spending of whole economy raises all together.

“Government policies can change spending”- Various fiscal and monetary policies of government are used to correct the situation of the economy and adjust the spending.

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Answer 3

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Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 1, Problem 1P

To determine

The appropriate principle of individual choice used.

Concept Introduction:

Principles of Individual Choice:

“Choice is necessary because resources are scarce”- Resources are always scarce in respect to its use, a single resource can be put to various alternative uses. Therefore, one has to choose between the various uses.

“The true cost of something is its opportunity cost”- The value of any commodity is derived from the forgone cost to get that particular commodity.

“How much is the decision at the margin”- The choice of having something depends on the benefits one receive from that choice.

“People usually exploit opportunities to make them better off”- People are always fond of alternative incentive, which can make them in better situation as compared to the previous situation.

“Gains from trade”- Individual always gain from trade by selling the product in which they are specialized and purchasing the product in which they are comparatively less specialized.

“Market moves towards equilibrium”- Market always tries to settle down at a point where no individual is comparatively better off in changing his choice.

“Resources should be used efficiently to achieve society’s goals”- Resources should be used in such a way that will not make any better off by making the other individual worse off.

“Markets usually lead to efficiency”- People always look for the opportunity, which can make them better off without making any other person worse off, this leads to efficiency in the market.

“When markets don’t achieve efficiency, government intervention can improve society’s welfare”- Government intervention is required when the market do not correct itself.

“One person’s spending is another person’s income”- The economy will always go on because a person earns only when the other person spends.

“Overall spending sometimes gets out of line with the economy’s productive capacity”- The economy can face inflation at the time when spending of whole economy raises all together.

“Government policies can change spending”- Various fiscal and monetary policies of government are used to correct the situation of the economy and adjust the spending.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

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Answer 4

Question

Definition Definition Degree to which financial markets incorporate all available information into the prices of assets. In a more efficient market, the prices reflect the available information more than that in a weak efficient market. It is difficult for investors to outperform the market in a strong efficient market. This is because all the available information is already discounted in the asset's price. However, in a weak-form efficiency, the market does not reflect all information in the asset's price. As a result, it becomes easier to generate better returns in a weak form or an inefficient market.

Chapter 1, Problem 1P

To determine