Mid2Problems3 - Practice Problems for Midterm Exam 2 -...

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Unformatted text preview: Practice Problems for Midterm Exam 2 - Econometrics 120A 1. A fictional study examined the joint distribution of education levels and GDP levels across countries. The following is the joint probability distribution. Education is entered in the left most column, and GDP in the top most row. Education/GDP Low Medium High Low 0.3 0.1 Medium 0.1 0.2 0.1 High 0.05 0.05 0.1 (a) What is the probability that a country has a High level of Education? What is the probability that it has Low level of Education? (b) Conditional on a country having a High GDP level, what is the probability it has High level of Education? (c) Are GDP and education levels independent? Justify your answer. (d) Suppose it costs a country 10$ billion to provide Low Education, 30$ billion to provide Medium Education and 50$ billion to provide High Education. What is the population mean of the cost of education? 2. A company produces nails that need to be 2 inches in length. While on expectation each nail is 2 inches long, not all nails are that exact length. Assume the standard deviation of length of each nailinches long, not all nails are that exact length....
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Mid2Problems3 - Practice Problems for Midterm Exam 2 -...

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