What should be the degrees of freedom (df) for fixed effects estimation if the data set includes ‘N' cross sectional units over ‘T' time periods and the regression model has ‘k' independent variables?
A. N-kT
B. NT-k
C. NT-N-k
D. N-T-k
Answer: C
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If price falls, what happens to the demand for a product?
a. It increases. b. It decreases. c. It does not change. d. Uncertain--economic theory has no answer to this question.
A friend of yours asks you why market prices are better than government-determined prices. Because you understand economic principles, you say that market-determined prices are better because they generally reflect
a. the value of a good to society, but not the cost of making it. b. the cost of making a good to society, but not its value. c. both the value of a good to society and the cost of making it. d. neither the value of a good to society nor the cost of making it.
Suppose that you are willing to pay $350 to see Leonard Cohen play at the Save-On-Foods Arena. Tickets cost $100, and the next-best alternative use of your time would be to work in paid employment earning $50 over the evening. The opportunity cost of seeing Leonard Cohen is equal to:
a. $100. b. $150. c. $200. d. $50.
First, explain what the PS relation represents. Second, explain why it has its particular shape
What will be an ideal response?