Selected Final Exam Solutions
1
Econ 312 - Spring 2007 - James Heckman Problem 1
(f) The control function approach can completely identify the parameters of the Roy model with the assumptions which are given along with the model as long as there is one ex
Final Exam
Economics 312
Instructor: James J. Heckman
June, 2007
1. (25 pts.) Consider the panel data model:
Yit = Xit + Fi + Uit
for i = 1, . . . , I persons, t = 1, . . . , T time periods (T 2). The Uit are iid,
the Fi are iid, Xi = (Xi1 , . . . , XiT )
Question 3
Rodrigo Pinto
Econ 312
July 17, 2007
1
Question 3
The Economic Model:
max u1 (X1 ) + u2 (X2 )
s.t.P1 X1 + P2 X2 Y
max X1 + bX2
s.t.X1 + P X2 Y
2
The marginal rate of substitution and the isoquants.
Isoquanta and Budget Contraints
Q X1
b
u1
tg
ECON 312
Solutions to Final, Question 1 (a)-(e)
Benjamin Moll - [email protected]
Question 1
Some general comments applying to all subquestions:
The key in all questions is to be comfortable with arguments involving the independence
operator, e.g. A B o