The extended least squares assumptions are of interest, because
A) they will often hold in practice.
B) if they hold, then OLS is consistent.
C) they allow you to study additional theoretical properties of OLS.
D) if they hold, we can no longer calculate confidence intervals.
Answer: C
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Consider indifference curves for goods X and Y. Suppose we plot the quantity of good Y on the vertical axis and the quantity of good X on the horizontal axis
a. Why are indifference curves downward sloping? b. What is the economic interpretation of the slope of an indifference curve? c. Following what we learned in the Appendix to this chapter, indifference curves would flatten out as someone consumes more of good X and less of good Y. What are we assuming when we draw indifference curves that become flatter?
Suppose that the extra cost to Tim of a third glass of soda is zero because he's at a restaurant that gives free refills. According to the Cost-Benefit Principle Tim should:
A. drink a third glass of soda if the extra benefit of doing so is positive. B. not drink a third glass of soda. C. drink a third glass of soda. D. drink a third glass of soda if his total benefit from drinking soda is positive.
Because the United States has had substantial deficits in goods and services, it has also necessarily had surpluses in
A. the federal budget. B. the sales of assets. C. the sales of military goods. D. its gold supplies.
Who said "Work expands so as to fill the time available for its completion," and "Work expands to occupy people available for its completion"?
A. Adam Smith B. C. Northcote Parkinson C. Karl Marx D. John Maynard Keynes