Consider the following regression model: yi= 
0+ 1xi + ui. If the first four Gauss-Markov assumptions hold true, and the error term contains heteroskedasticity, then _____.
A. Var(ui|xi) = 0
B. Var(ui|xi) = 1
C. Var(ui|xi) = 
i2
D. Var(ui|xi) = 
Answer: C
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Which of the following statements is true?
A) The basis for both first-degree price discrimination and third-degree price discrimination is differences in the buyers' willingness to pay for a good. B) The basis for both first-degree price discrimination and third-degree price discrimination is differences in the sellers' willingness to accept payment for a good. C) The basis for first-degree price discrimination is differences in willingness to pay, whereas the basis for third-degree price discrimination is differences in the sellers' willingness to accept payment for a good. D) The basis for first-degree price discrimination is differences in the seller's willingness to accept payment for a good, whereas the basis for third-degree price discrimination is differences in buyers' willingness to pay for a good.
The basic difference between macroeconomics and microeconomics is that: a. microeconomics looks at aggregate markets while macroeconomics is concerned with individual markets. b. macroeconomics is concerned with policy decisions while microeconomics applies only to theory
c. microeconomics is concerned with individual markets while macroeconomics is concerned with aggregate markets. d. macroeconomics is concerned with positive economics while microeconomics is concerned with normative economics.
Calculate inflation between 2018 and 2019 if the GDP deflator was 115 in 2018 and 130 in 2019.
What will be an ideal response?
In the United States, the bulk of health care spending is paid by health insurance companies. Such a system is also called a third-party payer system where consumers of health care pay a nominal fee and the rest are paid by the health insurance provider
Why might such a system lead to an inefficient outcome? A) Health insurance companies have an incentive to control cost and therefore tend to deny consumers many cutting edge medical treatments. B) Consumers have an incentive to over-consume health care services because they pay prices well below the cost of providing these services. C) Physicians concerned that insurance companies may not approve payments tend not to order expensive tests for their patients. D) Consumers fearing that excessive use of health care services may lead to a rise in insurance premiums tend to under-consume health care services.