Which of the following is true of Regression Specification Error Test (RESET)?
A. It tests if the functional form of a regression model is misspecified.
B. It detects the presence of dummy variables in a regression model.
C. It helps in the detection of heteroskedasticity when the functional form of the model is correctly specified.
D. It helps in the detection of multicollinearity among the independent variables in a regression model.
Answer: A
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A supply curve shows quantities supplied at various prices. It also shows the
A) total profit the firm earns at a given level of output. B) marginal benefit of the good. C) total cost of production. D) marginal cost of production. E) producer surplus, which is equal to the slope of the supply curve.
Which of the following is a result of a rent ceiling set below the equilibrium rent? I. equity in the housing market II. efficient allocation of resources III. a shortage of housing units
A) I and II B) I and III C) II only D) III only
Refer to the accompanying figure. If the price of a latte increases from $2.00 to $2.50:
A. total expenditure would decrease. B. the change in total expenditure, if any, would depend on the supply curve. C. total expenditure would increase. D. total expenditure would stay the same.
Some economists argue that well-functioning capital markets that allow funds to move from those who have but do not need funds to those who need but do not have funds, are essential for rapid economic growth. Well-functioning capital markets are an example of:
A. entrepreneurship. B. growth-compatible institutions. C. physical capital. D. human capital.