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s04pre2 - CORNELL UNIVERSITY Economics 321 Applied...

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CORNELL UNIVERSITY Economics 321: Applied Econometrics Spring 2004 G. Jakubson PRELIMINARY EXAM #2 This is a closed book exam. You are permitted to have a calculator and the packet with tables, the formula sheet, and handouts which was distributed with the exam. Answer the questions below in an exam book or books. SHOW YOUR WORK ! Be sure to label each answer, and each part of each answer, clearly. Neatness counts -- if I cannot read it I cannot give you credit. Note on the front cover of each bluebook which answers are contained in that book. As it says on the cover of The Hitchhiker's Guide to the Galaxy , DON'T PANIC ! If you get stuck on a problem, skip it and move on. If you cannot remember exactly how to answer a question, you may get partial credit for setting it up even if you don't solve it. Read the questions carefully. Note that questions have different weights, and parts within a question may not be weighted equally. You have 75 minutes to complete the nine (9) questions on the exam. There are 300 points possible. Good Luck ! 1. (10 points) Head Start is an educational enrichment program for disadvantaged children. For our purposes, equate low income with "disadvantaged." It is known that children from poor families, other things equal, do less well in school than children from families which are not poor. Not all poor children are enrolled in Head Start. Assume that enrollment in Head Start is random for children from low income families and that no non-poor children are in the program . Suppose that, in the population, 80% of children are from families which are not poor and 20% are from poor families. Of those who are poor, 25% are in Head Start. a. What is the probability that a randomly chosen child is a Head Start participant? Children from non-poor families score 85% on an educational assessment test, those from poor families who are not in Head start score 40% on average, and the average score for all children is 77%. b. What is the average test score for Head Start participants? 2. (10 points) For the population in question 1, Economics 321, Applied Econometrics Page 1 of 5 Prelim 2, Spring 2004 c:\…\s04pre2.doc
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a. What is the variance of average test scores among all three groups of children?
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