Lab 09
ECON 603
Instructor: Prof. Robin Sickles
Teaching Assistant: Mark Agerton
DUE BY
7pm Wednesday, November 30, 2015
Question:
1
2
3
4
5
Points:
20 20 20 20 20
Total
100
Introduction
The data file Lab09_Data.dta contains 57 quarterly observations on t
Problem Set 5
Due October 19, 2016 at 7pm
1
1. A workers utility function is given by U (X, Z) = [(X) + (Z) ] ,
where X is consumption of market goods and services and Z represents home
production. The home production function is Z = 1L, where 1 is time e
15.
Monopoly and oligopoly
A. Profit maximization by a monopoly
1.
Mathematical formulation
A monopolist wishes to maximize profits, just like a competitive firm,
but the monopolist recognizes that higher sales lead to a lower price
In other words, the mo
17.
Gains from trade
A. Edgeworth Box and absolute advantage
Two goods A and B, two individuals 1 and 2
Each individual has an absolute advantage in one good
Specifically, assume 1 initially has all the B and 2 all the A
Put their indifference curves toge
16.
Taxes
A. Taxes raise less revenue than they cost
1.
Administrative and compliance costs
This is the obvious and visible cost that everyone talks about
Computers would have lowered these costs except that the complexity
of the tax laws has increased in
Econ 602: Problem Set #3
Due Wednesday,
September
at 7
Due:
7pm, September
28th21
, 2015
pm
1. The weather is highly unpredictable in the island of Tobago. BetUnFair, Ltd. is a Tobagonianbased betting and gaming company that oers bets on weather. Thus, a
Problem Set 4
Due Wednesday, October 5, 2016 at 7pm
1. Pepe Inc. is a succesful company founded by a former Rice student. The
company produces manufactured goods. All production takes place in a big
factory. The factory uses three inputs to produce its ou
14.
Markets and efficiency
A. The roles of market prices
1.
Prices as a rationing device
As market prices decline from a maximum level where demand is zero
the person who values the good most would start consuming first
As prices continue to drop the marg
Business Schools
Driving Productivity*
Robin C. Sickles
Reginald Henry Hargrove Professor of Economics
Professor of Statistics
Rice University
Visiting Professor of Production Econometrics
Loughborough University
*Keynote address to the Chartered ABS Annu
1.6
The Research
Process
Point estimation and interval
estimation using regression analysis
Principles of Econometrics, 4th Edition
Chapter 1: An Introduction to Econometrics
Page 1
1.6
The Research
Process
The relationship among y, e and the true regress
Regression with Indicator Variables
Principles of Econometrics, 4th Edition
Chapter 2: The Simple Linear Regression Model
Page 1
2.9
Regression with
Indicator Variables
An indicator variable is a binary variable that takes the values zero or one
it is u
The Treatment Model
Principles of Econometrics, 4th
Edition
Chapter 7: Using Indicator Variables
Page 1
Define the indicator variable d as:
1 individual in treatment group
di
0 individual in control group
The model is then:
yi 1 2 di ei ,
i 1,K , N
An
1.6
The Research
Process
Prediction and
Goodness-of-Fit (R-Squared)
Principles of Econometrics, 4th Edition
Chapter 1: An Introduction to Econometrics
Page 1
1.6
The Research
Process
Prediction
y 0 b1 b2 x0
Pre
Principles of Econometrics, 4th Edition
Chap
R. Sickles
10/12/15
Talking points for preparation for Economics 603 Midterm Exam
October 20
The mid-term exam October 20 will cover material from the required energy economics
readings, topics and approaches to answering problems in the Wednesday evening
Regression with Indicator Variables
2.9
Regression with Indicator
Variables
An indicator variable is a binary variable that takes the values zero or one
it is used to represent a non-quantitative characteristic, such as gender,
race, location, or COUNTR
Testing Hypotheses about Multiple Coefficients
The F-Test
1.6
The Research
Process
We estimate:
We test:
yi 1 2 x2i 3 x3i ei
H 0 : 3 0
H 1 : 3 0
We hypothesize ythat
the
constrained
model
is:
x
e
i
1
2 2i
i
Principles of Econometrics, 4th Edition
Chapter
Hypothesis Tests of Regression Parameters
1.6
The Research
Process
Components of Hypothesis Tests
1. A null hypothesis, H0
2. An alternative hypothesis, H1
3. A test statistic
4. A rejection region
5. A conclusion
Principles of Econometrics, 4th Edition
C
1.6
The Research
Process
Least squares residuals and violations of the
assumptions of the general linear model
Principles of Econometrics, 4th Edition
Chapter 1: An Introduction to Econometrics
Page 1
-.2
-.1
Residuals
0
.1
.2
Residuals vs Fitted
6
6.5
7
Random Sampling
Principles of Econometrics, 4th
Edition
Appendix C: Review of Statistical Inference
Page 1
C.2
An Econometric
Model
Assume that the population has a center, which we
describe by the expected value of the random
variable Y:
EY
Eq. C.1
is
1.6
The Research
Process
Econometrics is ultimately a decision-making
device/tool that has 6 basic steps
1. Use economic theory to think about the problem
2. Develop a working economic model leading to an econometric
model
3. Obtain sample data, method of
Lab 04
ECON 603
Instructor: Prof. Robin Sickles
Teaching Assistant: Mark Agerton ([email protected])
DUE BY
7pm Wednesday, October 5, 2015
Question:
1
2
3
4
5
6
7
Total
Points:
10
10 10 15 20 15
20
100
Introduction
We continue working with simple regressi
Answers 1-5
. cd "/Users/yufeishan/Documents/Lab 02"
/Users/yufeishan/Documents/Lab 02
. log using "/Users/yufeishan/Documents/Lab 02/log 02.smcl"
. use "/Users/yufeishan/Documents/Lab 02/Lab01_WorldBankData.dta"
(Data from World Bank Development Indicato
Exam #1 Solutions
October 5, 2016
Question 1
(a)
MRS =
U
x
U
y
=
0.5x0.5 y 0.5
0.5y 0.5 x0.5
=
y
x
First, we must set the negative of the MRS equal to the negative of the price
ratio of goods x and y:
xy = 52
which implies y =
5x
2
(1)
Now consider the b
6. Uncertainty and Expected Utility
A. Maximizing expected value
1.
Assume consumers have an idea of both the range of outcomes of a random
choice prospect and also that probability that each outcome will occur
Suppose there is a collection of 5 urns, 4 o
NOTES ON UTILITY MAXIMIZATION FOR N GOODS
The problem involves a consumer choosing x1 , x2 , . . . , xN to maximize U (x1 , x2 , . . . , xN )
P
subject to a budget constraint, which we write as an inequality 0, namely y N
i=1 pi xi .
The way we do this is
9. Industry supply curves
A. Profit maximization
1.
Profits equal revenue minus costs
Using the cost function defined previously we can define a profit
function
(w1 ,w2 ,wN , p) = max [ pQ C(w1 ,w2 ,wN ,Q)]
Q
Since AC equals total cost divided by quantit