In estimating the effect of price on sales (Salesi = ?0 + ?1Pricei + Ui), you are attempting to find an instrumental variable that will solve the endogeneity problem caused by the confounding factor of number of competitors being within Ui, which is correlated with price. Which of the following statements would suggest that wholesale costs would satisfy the exogenous condition to be a potential instrument variable?
A. Wholesale costs are uncorrelated with price.
B. Wholesale costs are uncorrelated with number of competitors.
C. Wholesale costs are uncorrelated with sales.
D. Wholesale costs are correlated with price.
Answer: B
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Which of the following structures would be impacted by a bacterial infection of the inner ear?
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