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### empir_ex08[1]

Course: ECON ECON111, Spring 2009
School: Punjab Engineering...
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Punjab Engineering College - ECON - ECON111
Punjab Engineering College - ECON - ECON111
Punjab Engineering College - ECON - ECON111
Chapter 8Nonlinear Regression FunctionsSolutions to Exercises1. (a) The percentage increase in sales is 100 198196196 = 1.0204%. The approximation is 100 [ln (198) ln (196)] = 1.0152%. (b) When Sales2002 = 205, the percentage increase is 100 205196196
Punjab Engineering College - ECON - ECON111
Chapter 9Assessing Studies Based on Multiple RegressionSolutions to Exercises1. As explained in the text, potential threats to external validity arise from differences between the population and setting studied and the population and setting of interes
Punjab Engineering College - ECON - ECON111
Chapter 10Regression with Panel DataSolutions to Exercises1. (a) With a \$1 increase in the beer tax, the expected number of lives that would be saved is 0.45 per 10,000 people. Since New Jersey has a population of 8.1 million, the expected number of li
Punjab Engineering College - ECON - ECON111
Chapter 13Experiments and Quasi-ExperimentsSolutions to Exercises1. For students in kindergarten, the estimated small class treatment effect relative to being in a regular class is an increase of 13.90 points on the test with a standard error 2.45. The
Punjab Engineering College - ECON - ECON111
PART ONE Solutions to Chapter ExercisesChapter 2Review of ProbabilitySolutions to Exercises1. (a) Probability distribution function for Y Outcome (number of heads) probability Y=0 0.25 Y=1 0.50 Y=2 0.25(b) Cumulative probability distribution function
Punjab Engineering College - ECON - ECON111
Chapter 3Review of Statistics Review the ConceptsSolutions to Exercises1. The central limit theorem suggests that when the sample size ( n ) is large, the distribution of the2 2 sample average ( Y ) is approximately N Y , Y with Y = 2 Y = 43.0, we hav
Punjab Engineering College - ECON - ECON111
CHAPTER 21POLITICAL ECONOMICSThe problems in this final chapter are of two general types. First are four problems in traditional welfare economics (Problems 21.121.3 and 21.5) that illustrate various issues that arise in comparing utility among individu
Punjab Engineering College - ECON - ECON111
CHAPTER 2THE MATHEMATICS OF OPTIMIZATIONThe problems in this chapter are primarily mathematical. They are intended to give students some practice with taking derivatives and using the Lagrangian techniques, but the problems in themselves offer few econo
Punjab Engineering College - ECON - ECON111
CHAPTER 3PREFERENCES AND UTILITYThese problems provide some practice in examining utility functions by looking at indifference curve maps. The primary focus is on illustrating the notion of a diminishing MRS in various contexts. The concepts of the budg
Punjab Engineering College - ECON - ECON111
CHAPTER 4UTILITY MAXIMIZATION AND CHOICEThe problems in this chapter focus mainly on the utility maximization assumption. Relatively simple computational problems (mainly based on CobbDouglas and CES utility functions) are included. Comparative statics
Punjab Engineering College - ECON - ECON111
CHAPTER 5INCOME AND SUBSTITUTION EFFECTSProblems in this chapter focus on comparative statics analyses of income and own-price changes. Many of the problems are fairly easy so that students can approach the ideas involved in shifting budget constraints
Punjab Engineering College - ECON - ECON111
CHAPTER 6DEMAND RELATIONSHIPS AMONG GOODSTwo types of demand relationships are stressed in the problems to Chapter 6: cross-price effects and composite commodity results. The general goal of these problems is to illustrate how the demand for one particu
Punjab Engineering College - ECON - ECON111
CHAPTER 7PRODUCTION FUNCTIONSBecause the problems in this chapter do not involve optimization (cost minimization principles are not presented until Chapter 8), they tend to have a rather uninteresting focus on functional form. Computation of marginal an
Punjab Engineering College - ECON - ECON111
CHAPTER 8COST FUNCTIONSThe problems in this chapter focus mainly on the relationship between production and cost functions. Most of the examples developed are based on the Cobb-Douglas function (or its CES generalization) although a few of the easier on
Punjab Engineering College - ECON - ECON111
Chapter 8Strategy and Game TheoryGame Theory Game theory studies strategic interactions Game theory models portray complex strategic situations in a highly simplified and stylized setting abstract from personal and institutional details to get a mathem
Punjab Engineering College - ECON - ECON111
Chapter 8Strategy and Game TheoryGame Theory Game theory studies strategic interactions Game theory models portray complex strategic situations in a highly simplified and stylized setting abstract from personal and institutional details to get a mathem
Punjab Engineering College - ECON - ECON111
CHAPTER 9PROFIT MAXIMIZATIONProblems in this chapter consist mainly of applications of the P = MC rule for profit maximization by a price-taking firm. A few of the problems (9.29.5) ask students to derive marginal revenue concepts, but this concept is n
Punjab Engineering College - ECON - ECON111
Chapter 9Production FunctionsProduction Function The firms production function for a particular good (q) shows the maximum amount of the good that can be produced using alternative combinations of capital (k) and labor (l)q = f(k,l)Marginal Physical
Punjab Engineering College - ECON - ECON111
CHAPTER 10THE PARTIAL EQUILIBRIUM COMPETITIVE MODELThe problems in this chapter focus on competitive supply behavior in both the short and long runs. For short-run analysis, students are usually asked to construct the industry supply curve (by summing f
Punjab Engineering College - ECON - ECON111
Chapter 10Cost FunctionsDefinitions of Costs Accounting and economic costs are different Accountants stress out-of-pocket expenses, depreciation, and other bookkeeping entries economists focus more on opportunity cost Labor Costs to accountants, labor
Punjab Engineering College - ECON - ECON111
CHAPTER 11APPLYING THE COMPETITIVE MODELThe problems in this chapter are intended to illustrate the types of calculations made using simple competitive models for applied welfare analysis. Usually the problems start from a supply-demand framework much l
Punjab Engineering College - ECON - ECON111
Chapter 11Profit MaximizationThe Nature of Firms A firm is an association of individuals who have organized themselves for the purpose of turning inputs into outputs Different individuals will provide different types of inputs the nature of the contrac
Punjab Engineering College - ECON - ECON111
CHAPTER 12GENERAL EQUILIBRIUM AND WELFAREThe problems in this chapter focus primarily on the simple two-good general equilibrium model in which supply is represented by the production possibility frontier and demand by a set of indifference curves. Beca
Punjab Engineering College - ECON - ECON111
Chapter 12The Partial Equilibrium Competitive ModelMarket Demand Assume that there are only two goods (x and y) An individuals demand for x isMarket demand for X = x i ( px , py , I i )i =1nMarket DemandXpxIndividual 1s demand curvepxIndividu
Punjab Engineering College - ECON - ECON111
CHAPTER 13MONOPOLYThe problems in this chapter deal primarily with marginal revenue-marginal cost calculations in different contexts. For such problems, students primary difficulty is to remember that the marginal revenue concept requires differentiatio
Punjab Engineering College - ECON - ECON111
Chapter 13General Equilibrium and WelfarePerfectly Competitive Price System We assume all markets are perfectly competitive a large number of homogeneous goods both consumption goods and factors of production each good has an equilibrium price there
Punjab Engineering College - ECON - ECON111
CHAPTER 14TRADITIONAL MODELS OF IMPERFECT COMPETITIONThe problems in this chapter are of two types: analytical and essay. The analytical problems look at a few special cases of imperfectly competitive markets for which tractable results can be derived.
Punjab Engineering College - ECON - ECON111
Chapter 14MonopolyMonopoly A monopoly is a single supplier to a market This firm may choose to produce at any point on the market demand curve A monopoly exists because other firms find it unprofitable or impossible to enter the market Barriers to entr
Punjab Engineering College - ECON - ECON111
CHAPTER 15GAME THEORY MODELS OF PRICINGThe first six problems for this chapter are intended to illustrate the concept of Nash equilibrium in a variety of contexts. Many of them have only modest economic content, but are traditional game theory problems.
Punjab Engineering College - ECON - ECON111
Chapter 15Imperfect CompetitionShort-Run Decisions: Pricing &amp; Output When there are only a few firms in a market, predicting output and price can be difficult how aggressively do firms compete? how much information do firms have about rivals? how ofte
Punjab Engineering College - ECON - ECON111
CHAPTER 16LABOR MARKETSBecause the subject of labor demand was treated extensively in Chapter 9, the problems in this chapter focus primarily on labor supply and on equilibrium in the labor market. Most of the labor supply problems (16.116.6) start with
Punjab Engineering College - ECON - ECON111
CHAPTER 17CAPITAL MARKETSThe problems in this chapter are of two general types: (1) those that focus on intertemporal utility maximization and (2) those that ask students to make present discounted value calculations. Before undertaking the PDV problems
Punjab Engineering College - ECON - ECON111
CHAPTER 18UNCERTAINTY AND RISK AVERSIONMost of the problems in this chapter focus on illustrating the concept of risk aversion. That is, they assume that individuals have concave utility of wealth functions and therefore dislike variance in their wealth
Punjab Engineering College - ECON - ECON111
CHAPTER 19THE ECONOMICS OF INFORMATIONThe problems in this chapter stress the economic value of information and illustrate some of the consequences of imperfect information. Only a few of the problems involve complex calculations or utilize calculus max
Punjab Engineering College - ECON - ECON111
CHAPTER 20EXTERNALITIES AND PUBLIC GOODSThe problems in this chapter illustrate how externalities in consumption or production can affect the optimal allocation of resources and, in some cases, describe the remedial action that may be appropriate. Many
Yale - STAT - 680
Week 1 Lecture 1 An overview Introduction: Parametric Estimation vs. Nonparametric Estimation I: Parametric density estimation : Let Y1 , Y2 , . . . , Yn i.i.d. with density f (x), 2 R (or R2 , or R10 ). For instance, &quot; # 2 (x ) 1 exp ; 2 R; &gt; 0. f ; (x)
Yale - STAT - 680
Week 13 Lecture 24 Adaptive Wavelet Estimation Donoho and Johnstone (1995, JASA). Sketch of the proof. Consider the sequence model where yi = i + zi , i = 1; :; d and zi are independent normal N (0; 1) variables. Set r( ) = d 1 Pk^ k2 . The stein s 2 unbi
Yale - STAT - 680
Week 2 Lecture 3 General m . n Model: Let 2 Y1 ; Y2 , o. . , Yn i.i.d. R f; f (m) (x) dx M b Goal: Find f such that Z b f (x) f sup Ef 2Fon [0; 1] with density f 2 F, F =2CM n2m=(2m+1)(Note that K may not be nonnegative). The bias part is Z b Efn (x
Yale - STAT - 680
Week 3 Lecture 4 . n Model : Let Y1 ; Y2 , o. . , Yn i.i.d. on [ 1; 1] with density f 2 F , F = R 2 f; f (m) (x) dx M . b We have shown there is a kernel estimator fn such that supf 2FZb E fn (x)2f (x)Cn2m=(2m+1).Because it is hard to analyze the
Yale - STAT - 680
Week 4 Lecture 7 Optimal rate of convergence in the sup-norm Model : Let Y1 ; Y2 , . . . , Yn i.i.d. on [0; 1] with density f 2 F (M ), Hlder ball of order . Minimax rate : It can be shown that b inf sup E f^ f F (M ) 2f1Cn log n2 =(2 +1).For simp
Yale - STAT - 680
Week 5Lecture 9 A lower bound by Tsybakov Parameter space = cfw_0 , 1 , . . . , M 2s, for all 0 i = j M. (1)d (i , j ) Usually s is the rate of convergence you have obtained by a specic procedure, and d is a distance related to the loss function. Redu
Yale - STAT - 680
Week 6 Lecture 11 Kernel regression and minimax rates Model: Observe Yi = f (Xi ) + i where i , i = 1, 2, . . . , n, i.i.d. with Ei = 0. We often assume Xi are i.i.d. or Xi = i/n. NadarayaWatson estimator Let wi (x) = K Xih x . The Nadaraya-Watson estimat
Yale - STAT - 680
Week 7 Lecture 12 Fourier estimation and Linear Minimaxity An orthonormal basis for L2 ([0; 1]) is1 2k(x) (x)= =1 p2 cos (2 kt) ;2k(x) =p2 sin (2 kx) ; k1.f The periodic Sobolev class W2 (M ) is dened as F= f:jZ1f (m)2M ; f (j ) (0) = f (
Yale - STAT - 680
Week 8 Lecture 15 Model: yi = whereM i+ zi , zii:i:d:N (0; 1) , )2Mis an ellipsoid in l2 (N): ( =:Xia2 2 ii P a2 iM2 i. and ai ! 1, thenPinsker Theorem: Let s RN ( ; )=:MRL ( ; ) as! 0.We will only prove this result for the following
Yale - STAT - 680
Week 9 Lecture 16 Quadratic functional estimation Model: Observe the sequence model: yi =i:i:d: i+n1=2ziwhere zi N (0; 1). The model comes from the white noise model (or many other models): dy (t) = f (t) dt + n 1=2 dB (t) , t 2 [0; 1] . Let f i (t)
Yale - STAT - 680
Week 10 Lecture 18 Linear or nonlinear estimation The sparsity of the coe cients may be possibly quantied using lp norms k kp , which track sparsity for p &lt; 2, with smaller p giving more stringent measures. For instance, p when = 1= n, but apparently (1;
Yale - STAT - 680
Week 11 Lecture 20 An Introduction to Wavelet regression Denition: Wavelet is a function such that f2j=2 2j k ; j; k 2 Z gis an orthonormal basis for L2 (R). This function is called mother wavelet which can be often constructed , from father wavelet '. T
Yale - STAT - 680
Week 12 Lecture 22 A group of students present Donoho and Johnstone (PTRF, 1994)?1Lecture 23 Review from the presentation Suppose we observe yi = wherei+ zi ; i = 1; :; n,=1is constrained to lie in a ball of radius C dened by lp norm, n o = ; k kp C
HKU - FINA - FINA1003
CHAPTER 1 B-1CHAPTER 1 INTRODUCTION TO CORPORATE FINANCEAnswers to Concepts Review and Critical Thinking Questions 1. Capital budgeting (deciding whether to expand a manufacturing plant), capital structure (deciding whether to issue new equity and use t
HKU - FINA - FINA1003
B-54 SOLUTIONSCHAPTER 5 INTRODUCTION TO VALUATION: THE TIME VALUE OF MONEYAnswers to Concepts Review and Critical Thinking Questions 1. 2. The four parts are the present value (PV), the future value (FV), the discount rate (r), and the life of the inves
HKU - FINA - FINA1003
B-64 SOLUTIONSCHAPTER 6 DISCOUNTED CASH FLOW VALUATIONAnswers to Concepts Review and Critical Thinking Questions 1. 2. 3. 4. The four pieces are the present value (PV), the periodic cash flow (C), the discount rate (r), and the number of payments, or th
HKU - FINA - FINA1003
B-110 SOLUTIONSCHAPTER 7 INTEREST RATES AND BOND VALUATIONAnswers to Concepts Review and Critical Thinking Questions 1. 2. 3. No. As interest rates fluctuate, the value of a Treasury security will fluctuate. Long-term Treasury securities have substantia
HKU - FINA - FINA1003
B-130 SOLUTIONSCHAPTER 8 STOCK VALUATIONAnswers to Concepts Review and Critical Thinking Questions 1. 2. 3. The value of any investment depends on its cash flows; i.e., what investors will actually receive. The cash flows from a share of stock are the d
HKU - FINA - FINA1003
CHAPTER 9 B-139CHAPTER 9 NET PRESENT VALUE AND OTHER INVESTMENT CRITERIAAnswers to Concepts Review and Critical Thinking Questions 1. A payback period less than the projects life means that the NPV is positive for a zero discount rate, but nothing more
HKU - FINA - FINA1003
B-158 SOLUTIONSCHAPTER 10 MAKING CAPITAL INVESTMENT DECISIONSAnswers to Concepts Review and Critical Thinking Questions 1. In this context, an opportunity cost refers to the value of an asset or other input that will be used in a project. The relevant c
HKU - FINA - FINA1003
B-178 SOLUTIONSCHAPTER 11 PROJECT ANALYSIS AND EVALUATIONAnswers to Concepts Review and Critical Thinking Questions 1. 2. 3. Forecasting risk is the risk that a poor decision is made because of errors in projected cash flows. The danger is greatest with
HKU - FINA - FINA1003
B-198 SOLUTIONSCHAPTER 12 SOME LESSONS FROM CAPITAL MARKET HISTORYAnswers to Concepts Review and Critical Thinking Questions 1. They all wish they had! Since they didnt, it must have been the case that the stellar performance was not foreseeable, at lea
HKU - FINA - FINA1003
CHAPTER 13 B-207CHAPTER 13 RISK, RETURN, AND THE SECURITY MARKET LINEAnswers to Concepts Review and Critical Thinking Questions 1. Some of the risk in holding any asset is unique to the asset in question. By investing in a variety of assets, this unique
HKU - FINA - FINA1003
CHAPTER 15 B-235CHAPTER 15 COST OF CAPITALAnswers to Concepts Review and Critical Thinking Questions 1. It is the minimum rate of return the firm must earn overall on its existing assets. If it earns more than this, value is created. Book values for deb