Econ 448
Instrumental variables - Human Capital
Pedro Hancevic
1
Instrumental Variables
Recall from previous discussion the linear regression model
y = 0 + 1 x +
(1)
with its main assumption: E(|x) = E(u) = 0. This assumption is telling us that for any g
M. Muniagurria Econ 364 Microeconomics Handout (Part 1) I. TECHNOLOGY (1) : Production Function, Marginal Productivity of Inputs, Isoquants
Case of One Input: L (Labor): q = f (L) Let q equal output so the production function relates L to q. (How much out
Production Function, Average and Marginal Products, Returns to Scale, Change of Variables Production Function: links inputs to amont of output. Assume we have 2 inputs: Labor (L) and Capital (K), and we use Y for output . Then we write: Y = F (L , K) , wh
M. Muniagurria MICROECONOMIC HANDOUT (Part 2) V. TWO SECTOR ECONOMY: PRODUCTION SIDE
(1)
Case of one input: L (Labor) - Assume 2 produced goods: M & F - Fixed amount of labor: L (Needs to be allocated to the 2 sectors) - Firms maximize profits taking pric
Patterns of Trade in H-O model. (The H-O Theorem)
1.) Construct 3 pp! for -a country.
It will look like this:
'Why the increasing opportunity costshape?
Lets think abodt this;
' A nice motivating picture of the H0 model is the following.
' 3 2
Econ 364
Linear Regression
Linear regression attempts to model the relationship between two variables by fitting a linear equation to observed data. One variable is considered to
be an explanatory variable (or regressor), and the other is considered to be a depend
Handout on HK calculation
Weil : Table 6.2 and Figures 6.9 and 6.10
According to Table 6.2 labor has seven different skill levels: Raw Labor (zero schooling) and 4 -8-10-12-14-16
years of schooling.
Let wi be the wage paid to a worker with i years of scho
Ricardian Model Example used in lecture :
Consider a model with two countries (Home and Foreign (*) , two goods (Textiles and Soy) and one input
(Labor) . The production technologies are specified by the following unit labor requirements:
Home
Soy
Textile
Specific Factors Models: Argument to show that an increase in the endowment of the specific factor decreases the real return (per unit) of both specific factors. Assumptions: (1) 3 factors : labor (L, mobile) , land (T, specific to food sector ), capital
Lab Report #1
ECON 380
DUE (class time): January 24
Part I: Basic Supply and Demand
1.
Complete Tables 2 through 4 below.
2.
Plot the prices at which pictures traded in the first session of the experiment. You can
do this either using graph paper, or a co
Econ 380 Problem Set #2 Due February 21 1. Suppose that you are a firm (C) that manufactures a single product (wudgets) at a marginal cost of $15.00 per unit. Wudgets sell for $49.00 per unit and you have the capacity of producing a maximum of 10 widgets.
Name_
Econ 380
Experiment Report #2
Due March 4
Below is a summary of the profit maximizing solutions and costs your classmates computed for
firms of type A, B, and C for the tax and Command and Control instruments. Information on
the outcome of the permi
Name _
Economics 380
Spring 2008
Lab Report/Homework #3
Due: April 17, 2008
1. You are the sole resource manager of a fishery that has a carrying capacity of 70 fish; you
have the task of managing it to maximize profits for an infinite time horizon (or a
Econ 380 Problem Set #2 Due February 21 1. Suppose that you are a firm (B) that manufactures a single product (wadgets) at a marginal cost of $23.00 per unit. Wadgets sells for $75.00 per unit and you have the capacity of producing a maximum of 10 wadgets
Econ 455
Fall 2013
Lapan
Answers - Problem Set 1
(Producer and consumer surplus)
1.
Consider a firm with total costs:
(
)
TC ( y ) = 6 ;
2 y + y2
y0
a) The firms profits, as a function of output and price ( y )= p yf y TC ( y )=
i.
Find the output level,
Fall 2013
Econ 455
Harvey Lapan
Problem Set 4 - Due December 6, 2013
1. Consider a world of two countries (US, India) with these demand and supply curves:
Demand 400 5 PcUS ; Supply = 15 Pcus where Pcus is the price of clothing in the US;
=
US:
INDIA: Dem
Fall 2013
Econ 455
Harvey Lapan
Problem Set 2 Due October 1, 2013
1.
(Ricardian Model, Chapter 2) Consider a Ricardian model of comparative advantage. There
are two countries, the U.S. and India. Each country can produce two goods, shirts (S) and food (F)
Fall 2013
Econ 455
Harvey Lapan
Answers - Problem Set 3
1.
Consider a simplified version of the Heckscher-Ohlin model with the following technology:
To produce food (F): 2 units of unskilled labor and 1 unit of skilled labor are required for each unit of
Fall 2013
Econ 455
Harvey Lapan
Problem Set 3 - Due November 12, 2013
1. (Simplified version of Heckscher-Ohlin model). Consider a country which can produce two goods:
electronics (E) and food (F) using two inputs: unskilled labor (L) and skilled labor (S
Econ 455
Fall 2013
Lapan
Problem Set 1 - Due Sept. 12, 2013
(Producer and consumer surplus; review)
The purpose of this problem set is to review concepts from Econ 301 and to illustrate how these concepts
can be used to answer real world policy questions.
Fall 2013
Econ 455
Harvey Lapan
Problem Set 4 - Due Friday, December 6, 2013
(Problem Set must be turned in by Noon on Friday; it can be left in my mailbox in Heady Hall)
1. Consider a world of two countries (US, India) with these demand and supply curves
Fall 2013
Econ 455
Harvey Lapan
Answers to Problem Set 2 October 3, 2013
1.
Consider a Ricardian model of comparative advantage. There are two countries, the U.S. and
India. Each country can produce two goods, shirts (S) and food (F). Assume the US has 30