Suppose we are studying the effects of expanded income supplement for senior citizens on their health. We use the two-group, to-period differences-in-differences setup, with working-age citizens as our control group.Which of the following is a key assumption for the validity of this identification strategy?
A. In the absence of the intervention, theaverage health outcomes would be the same for both groups.
B. Before the intervention, the average health outcomes were the same for both groups.
C. After the intervention, the average health trends would be the same for both groups.
D. In the absence of the intervention, theaverage health trends would be the same for both groups.
Answer: D
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The "housing bubble" discussed in the text book refers to:
A. housing prices rising much more quickly than the rest of prices in the economy. B. housing prices within a certain area of the U.S. rising disproportionately with the rest of houses in the economy. C. an unexplained increase in the demand for houses which caused the prices of houses to rise. D. a supply shock to the housing market, which caused housing prices to increase.
The efficient markets theory of stock prices, says that new information
a. is quickly and completely incorporated into stock prices b. is incorporated into stock prices only when discovered by fundamental analysis c. causes stock prices to increase d. has little impact on stock prices e. is incorporated into stock prices with a time lag of a few days
A monopoly occurs when
A. There is only one producer of a particular good or service. B. A firm gains some level of market power. C. A firm charges a price greater than the equilibrium price. D. There is an underproduction of a good or service by a firm.
Suppose Cournot duopolist firms operate with each having a cost of 30qi (i = 1,2 ) so that each firm's marginal cost is 30. The inverse market demand curve is P = 120 - Q where Q = q1 + q2. At the Nash-Cournot equilibrium, the market price, P, is
A) 30. B) 45. C) 60. D) 90.