The following are reasons for studying randomized controlled experiment in an econometrics course, with the exception of
A) at a conceptual level, the notion of an ideal randomized controlled experiment provides a benchmark against which to judge estimates of causal effects in practice.
B) when experiments are actually conducted, their results can be very influential, so it is important to understand the limitations and threats to validity of actual experiments as well as their strength.
C) randomized controlled experiments in economics are common.
D) external circumstances sometimes produce what appears to be randomization.
Answer: C) randomized controlled experiments in economics are common.
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It is appropriate to use the supply-and demand-model if, in a market
A) everyone is a price taker with full information about the price and quality of the good. B) firms sell identical products. C) costs of trading are low. D) All of the above.
Total product is maximized where
A) average product is maximized. B) marginal product is maximized. C) average product is equal to 0. D) marginal product is equal to 0.
If the price elasticity of demand for Cheer detergent is 3.0, then a
a. 12 percent drop in price leads to a 36 percent rise in the quantity demanded b. 12 percent drop in price leads to a 4 percent rise in the quantity demanded c. $1,000 drop in price leads to a 3,000-unit rise in the quantity demanded d. $1,000 drop in price leads to a 333-unit rise in the quantity demanded e. 12 percent rise in price leads to a 36 percent rise in the quantity demanded
The airline dominating Charlotte, North Carolina, once contended that it could not overcharge for fear of potential competition, if not at Charlotte, then at Raleigh, a two-hour drive away. Do you find this argument compelling, given the theory of contestable markets?