Which of the following is a reason for using the correlated random effects approach?
A. It provides unbiased and consistent estimators when the idiosyncratic errors are serially correlated.
B. It provides unbiased and consistent estimators when the idiosyncratic errors are heteroskedastic.
C. It provides a more efficient estimate than the fixed effects approach.
D. It provides a way to include time-constant explanatory variables in a fixed effects analysis.
Answer: D
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The above figure shows the market for pizza. The market is in equilibrium when some of the pizza firms go out of business. What point represents the most likely new price and quantity?
A) A B) B C) C D) D E) E
A decrease in the price level will _____
a. shift the consumption function upward b. shift the consumption function upward c. result in an upward movement along the consumption function d. result in a downward movement along the consumption function e. shift the consumption function downward
Most trading nations do not completely specialize. Incomplete specialization is mainly due to:
a. decreasing opportunity costs. b. increasing opportunity costs. c. constant opportunity costs. d. perfectly substitutable resources.
An apple farmer must decide how many apples to harvest for the world apple market. He knows that there is a one-third probability that the world price will be $1, a one-third probability that it will be $1.50, and a one-third probability that it will be $2. His cost function is C(Q) = 0.01Q2. The farmer's maximum expected profit is:
A. $0. B. ?$7.75. C. $7.75. D. None of the answers are correct.