Econ375SampleMidterm

Econ375SampleMidterm - ECON 375 SAMPLE MIDTERM EXAM MAY 03...

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Unformatted text preview: ECON 375 SAMPLE MIDTERM EXAM, MAY 03, SPRING 2010 Name ID 90 Minutes Instructions: 1. This is a closed book exam. 2. You are allowed to have a cheat sheet. 3. Please show all your work. 4. Fully label all graphs. Good Luck 1 (1) (20 points) In a given population of two-earner male/female couples, male earnings have a mean $40 , 000 per year and a standard deviation of $12 , 000. Female earnings have a mean of $45 , 000 per year and a standard deviation of $18 , 000. The correlation between male and female earnings for a couple is 0 . 8. Let C denote the combined earnings for a randomly selected couple. a). What is the mean of C ? b). What is the covariance between male and female earnings? 2 c). What is the standard deviation of C ? d). Convert your answers from dollars to euros. 3 (2) (20 points) Consider the estimator tildewide Y = 1 n parenleftbigg 1 2 Y 1 + 3 2 Y 2 + 1 2 Y 3 + 3 2 Y 4 + ... + 1 2 Y n − 1 + 3 2 Y n parenrightbigg Show that E ( tildewide Y ) = μ Y and V ar ( tildewide Y ) = 1 . 25 σ 2 Y /n . 4 (3) (20 points) A regression of average weekly earnings on age measured in years using a random sample of college educated full time workers aged 25-65 yields the following: hatwider AWE = 696 . 7 + 9 . 6 × Age,R 2 = 0 . 023 ,SER = 624 . 1 a) Explain what the coefficient values 696.7 and 9.6 mean. b) The standard error of the regression, SER is 624.1. What are the units of measurement for the SER dollars (dollars? years? or is SER unit-free?) c) The regression R 2 is 0.023. What are the units of measurement for the R 2 (dollars? years? or is R 2 unit-free?) d) What is the regression’s predicted earnings for a 25-year old worker?...
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This note was uploaded on 04/30/2010 for the course ECO 375 taught by Professor Biner during the Spring '10 term at DePaul.

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Econ375SampleMidterm - ECON 375 SAMPLE MIDTERM EXAM MAY 03...

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