Omitted variable bias
A) will always be present as long as the regression R2 < 1.
B) is always there but is negligible in almost all economic examples.
C) exists if the omitted variable is correlated with the included regressor but is not a determinant of the dependent variable.
D) exists if the omitted variable is correlated with the included regressor and is a determinant of the dependent variable.
Answer: D
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Two software firms have developed an identical new software application. They are debating whether to give the new app away free and then sell add-ons or sell the application at $30 a copy
The payoff matrix is above and the payoffs are profits in millions of dollars. What is the Nash equilibrium of the game? A) Both Firm 1 and 2 will sell the software application at $30 a copy. B) Both Firm 1 and 2 will give the software application away free. C) Firm 1 will give the application away free and Firm 2 will sell it at $30. D) There is no Nash equilibrium to this game.
The factor of production called "capital" refers to:
A. any input that's not a human being or dirt. B. any piece of raw material that is used to produce goods and services. C. the amount of money a firm has access in order to run its business. D. manufactured goods that are used to produce new goods.
Which of the following examples is most typical of monopolistic competition?
a. ARD, Inc. competes with six other firms in the paper towel market. b. Tropics, Inc. is the only producer of guava in the international market. c. Glow, Ltd. and SolarMax, Inc, are the two major producers of solar panels. d. TropicFreeze, Inc. remains the sole producer of papaya ice cream.
Modern economic growth refers to countries that have experienced an increase in:
A. real GDP over time. B. nominal GDP over time. C. real output spread evenly across all sectors of the economy. D. real output per person.