The preceding graphic from the St. Louis Federal Reserve
A) shows a dynamic view of income differences
B) indicates that very few households in the lowest two groups moved upward over the decade
C) reflects a highly skewed income distribution
D) all of the above
Answer: A) shows a dynamic view of income differences
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The logic of control variables in IV regressions
A) parallels the logic of control variables in OLS B) only applies in the case of homoskedastic errors in the first stage of two stage least squares estimation C) is different in a substantial way from the logic of control variables in OLS since there are two stages in estimation D) implies that the TSLS is efficient
Suppose Darby values a certain smart phone at $400 . Jake values the same smart phone at $300 . The pre-tax price of this smart phone is $250 . The government imposes a tax of $75 on each smart phone, and the price rises to $325 . The deadweight loss from the tax is
a. $150. b. $100. c. $50. d. $0.
Suppose that you can hire your mechanic for up to six hours. The total benefit and total cost functions are B(H) = 300H - 20H2 and C(H) = 55H + 60H2. The corresponding formulas for marginal benefit and marginal cost are MB(H) = 300 - 40H and MC(H) = 55 + 120H. For how many hours should you hire your mechanic?
A. 1.53 hours B. 0.65 hours C. 6 hours D. 0 hours
Income effect
What will be an ideal response?