MICROECONOMICS
MICROECONOMICS
11th Edition
ISBN: 9781266686764
Author: Colander
Publisher: MCG
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Chapter 5.1, Problem 10Q
To determine

Effect on price when the cost of textbook included in tuition.

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Problem 1 Experiments/Randomized Control Trial Suppose you are interested in studying the effect of being a part of the labor union on an individual's hourly wage. You collect data on 1000 people and run the following regression. Wage=Bo+B₁Labor Union; + &¿ where Labor Union is a dummy variable which is equal t to 1 for people who are a part of labor union and 0 for others. a. Suppose you estimate b. Do you think B₁ = 1.6. Interpret B₁ (5 points) 1 1 is biased or unbiased? Explain. (5 points) Now suppose you conduct a randomized control trial to answer the same question. You randomly assign some individuals to be a part of the labor union and others to not be a part of the labor union. The first step you take is to ensure that the randomization was done correctly. Then you estimate the following equation: = Wage, Bo+B₁Treatment; + &; Treatment =1 if the student is assigned to be a part of Labor Union Treatment=0 if the student is assigned to not be a part of Labor Union c. Why is it…
The figure to the right contains a point indicating the​ economy's initial price and aggregate output ​(Upper P 0P0​,Upper Y 0Y0​) combination.   Suppose that the price level rises such that P Subscript 1 ​ > P Subscript 0.   Using the point drawing​ tool, identify a potential location for the​ economy's new price and aggregate output ​(Upper P 1P1​,Upper Y 1Y1​) combination. Label this point B.    Using the line drawing​ tool, draw the aggregate demand curve through these points. Properly label the line.     picture is attached
Question content area left Part 1 The figure to the right gives an​ economy's initial aggregate demand​ (AD) curve.   Using the line drawing​ tool, show a decrease in aggregate demand. Properly label this line. Part 2 ​Note: Carefully follow the instructions above and only draw the required object. Part 3 Which of the following will generate a decrease in aggregate​ demand?     A. Increased government expenditures for infrastructure.   B. A tax increase.   C. An increase in the price level.   D. An increase in the money supply.
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