Mid-Term Spring 2003
(1 point) You want to purchase XYZ stock at $60 from your broker using as little of your
own money as possible. If initial margin is 50% and you have $3000 to invest, how
many shares can you buy?
Problem Set 3
Due March 2, 2007
1. a. What is the difference (conceptually) between the short run price and income
elasticities of the demand for gasoline and the long run price and income elasticities of
the demand for gasoline?
Null hypothesis: mu=100
Alternative hypothesis: mu<100
(11)the test statistic:
The p-value= P(t with df=n-1=9 <-1.01) =0.1694 (from student t table)
Null hypothesis: mu=240
Alternative hypothesis: mu n
Principles of Macroeconomics, 9e - TB1 (Case/Fair/Oster)
The Government and Fiscal Policy
Government in the Economy
Fiscal policy refers to
the techniques used by a business firm to reduce its tax liability.
Example with Currency Components
All returns are calculated back into the domestic currency. The foreign
exchange exposures of the dierent asset classes are not perfectly hedged
back into the domestic portfolio currency. The upper part of the table
Problems with happiness research
Measurement problem. Even if the true relation between happiness was
linear (u = ky), you will get a concave pattern if the scale of happiness is
bounded and the scale of wealth is unbounded.
the meaning of 7 on the sc
Economists use the word utility to describe the preferences that rationalize observed choices.
Kahneman calls these revealed preferences decision utility.
These are the preferences that rationalize decisions.
These are the preferenc
Is exponential discounting (and hence dynamic
consistency) a good assumption?
The property of dynamic consistency is appealing.
Early selves and late selves agree!
selft=0 decides C0 and plans for C1, C2.
selft=1 decides C1 and plans for C2, C3.
Sanfey and Cohens ultimatum experiment
(Sanfey et al 2003, Science, v. 300, p. 1755)
30 subjects neuroimaged (fMRI) in the responder
position of the ultimatum game
Particular neural loci are disproportionately
activated when subjects receive unfair offe
a) The price will be the price in region B minus the cost to transport the gas
there. $6 $1 = $5
b) The eect of the price cap will be to reduce the amount of gas that is
supplied in region A. The size of the reduction is related to the elasti
PRACTICE PROBLEMS CH. 1, 2, 3
Know the difference between a sample and a population.
Know the difference between a statistic and a parameter.
Know the difference between a histogram and a bar graph.
Know the difference betwee