ECONOMICS
HOMEWORK
Aslhan Mhc
1107011014
aatay kten
1107011007
Market Failure
Market failure do not succeed allocative efficiency in all situation of unregulated
market. Market failure occur from imperfect competition, externalities, income
inequality, et

Principles of Microeconomics
Solutions to
Sample Final Examination
Part A:
Multiple Choice Questions
1. E
2. CThereisinsufficientinformationtodeterminewhichchoicesheshouldmake,butan
optimalchoiceshouldincludetheopportunitycostofthe$75,000salaryofferifthe

Principles of Microeconomics
Sample Final Examination
(Based on material in Chapters 1- 16)
Part A:
Multiple Choice Questions (30 questions @ 1 mark each = 30 Marks)
1. Wheneconomistssaythereisnosuchthingasafreelunch,theymeanthat
A. wemustpaymoneyforevery

Econometrics
Chapter 13: Experiments and Natural Experiments
Experiments
Experiments are very rare in economics/business. So why even bother talking about them?
They provide a benchmark against which we can evaluate observational studies.
This is particul

Econometrics
Chapter 8: Nonlinear Regression Functions
Maybe the eect of X1 on Y depends on the value of X1 or maybe depends on some other variable.
How to deal with this.
In this case the linear model is
- the functional form is wrong.
Your estimates w

Econometrics
Chapter 10: Panel Data
If we have data on observations over time, it gives us one way to deal with OVB.
Specically if the unobserved variable that is causing the problem is constant over time, then we
can control for it even if we do not obse

Econometrics
Chapter 11: Regressions with Binary Dependent Variables
The Y variable is a 0/1, yes/no type variable.
Ex: does person get the job, do they get red, are they employed, did they get the loan, etc.
Prediction:
Of course will never predict exact

Econometrics
Chapter 4: Linear Regression with One Regressor
Basic Model
What we want to do is understand how one variable X is related to another variable Y
Lets look at the relationship between class size (measured as student teacher ratio) and student

Econometrics
Chapter 6: Linear Regression with Multiple Regressors
Does the OLS assumption #1 hold? Or do we have Omitted Variable Bias?
Omitted Variable Bias
Lets look at the class size and test score example again.
We found that smaller class sizes were

Econometrics
Chapter 12: Instrumental Variables
Recall some possible big problems for OLS:
1. Omitted variable bias - in case we cannot nd adequate controls
2. Measurement error in our X
3. Simultaneity
All lead to
and we will have biased estimates of
Se

Econometrics
Chapter 7: Hypothesis Tests and CIs in Multiple Regression
Hypothesis Tests and CIs for a Single Coecient
Everything is the same as we did when we were in the single regressor case - just the formula for
the SE is dierent, but software will g

Econometrics
Chapter 9: Assessing Studies based on Regression
Internal and External Validity
Internal - are the inferences about causal eects valid for the population studied
External - can the results be generalized to populations/settings outside from w

Econometrics
Chapter 5: Hypothesis Test and CIs in Simple OLS
In the class size example we estimated a 1 - the eect of class size on test scores.
Say some tax payers are mad that the city is wasting money because they claim class size is not
related to te