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# a1 - ECON 3210 3.0 Section A Fall 2011 Assignment 1(Due...

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ECON 3210 3.0 Section A - Fall 2011 Assignment 1 (Due Date: September 28, 2011) Question 1: Let X be a random variable with mean μ x and variance σ 2 x . Also let Y = a + bX where a and b are known constants. Show that a. μ y = a + x . b. σ 2 y = b 2 σ 2 x . Question 2: Let grthemp denote the proportionate growth in employment (in percentage), at the country level, from 1990 to 1995, and let salestax denote the country sales tax rate (in percentage). The ﬁnance minister of the country reported that grthemp = 0 . 043 - 0 . 78 salestax. Interpret the intercept and slope in the equation. Question 3: The Human Resources Director of the Econometrics Coroperation told their Section Managers that they use the following formula to calculate salary of their employees. log( salary ) = 3 . 8 + 0 . 03 experience where salary is the annual salary and experience is the number of previous years of relevant experience. a. What is the starting salary for Tom, who joined the company with no previous work

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a1 - ECON 3210 3.0 Section A Fall 2011 Assignment 1(Due...

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