An alternative to using simultaneous equation models with panel data is:
A. to use OLS estimates after first differencing the data.
B. to use fixed effects transformation on the equations and then apply 2SLS.
C. to convert the equations into reduced form and then apply feasible generalized least squares.
D. to convert the equations into reduced form and then apply OLS.
Answer: B
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The difference between the salaries paid to movie stars and to actors who play supporting roles is much greater today than it was in the 1930s and 1940s. What factor explains this increase in relative salaries over time?
A) There was no actors' union in the 1930s and 1940s. The rise of strong actors' unions has caused salaries of movies stars to be greater today than in previous years. B) Technological advances in the entertainment industry increase the revenue that successful movies can earn. This has increased the movie studios' willingness to pay high salaries to movie stars. C) The studio system that dominated the industry in the 1930s and 1940s no longer exists. The studio system allowed movie studios to sign actors to long-term contracts that kept salaries down. D) Agents of movies stars are effective in obtaining large salaries for their clients today. Few movie stars had agents to negotiate for them in the 1930s and 1940s.
A good in the United States is worth $2,000 and the same good in Mexico is worth 50,000 pesos. This implies that $1 U.S. is worth _____ pesos
a. 25 b. 30 c. 15 d. 24
If a tax is levied on the sellers of a product, then there will be a(n)
a. downward shift of the demand curve. b. upward shift of the demand curve. c. decrease in quantity demanded. d. increase in quantity demanded.
In the supply-and-demand diagram of the market for peanut butter, the equilibrium point has moved up and to the right. What could have caused this?
A) a fall in the price of peanuts B) a rise in the price of peanuts C) a rise in income, assuming that peanut butter is an inferior good D) a shift in preferences toward peanut butter E) none of the above