Question 1

Econometrics is the statistical analysis of economic data.

Accepted Answer

Econometrics involves applying statistical methods to economic data in order to test economic theories and make predictions. It is used to study relationships between variables, estimate parameters of economic models, and forecast future economic trends.

Question 2

An experimental study is one which individuals are randomly assigned to the treatment and control groups.

Accepted Answer

In an experimental study, individuals are randomly assigned to the treatment and control groups to minimize bias and establish cause-and-effect relationships. Thus, option A is true. Option B is false as it contradicts the definition of an experimental study.

Question 3

Primary data sources include information gathered from interviews and experiments.

Accepted Answer

Primary data sources are firsthand sources of information that are directly collected by the researcher through methods such as interviews and experiments. Therefore, the statement is true.

Question 4

It has been suggested in the text that raising taxes on beer will reduce teen fatalities.Comment on this.

Accepted Answer

The answer of It has been suggested in the text...

Question 5

A model is a simplified description of some aspect of the economy.

Accepted Answer

A model is a simplified representation of the economy that focuses on specific variables or relationships. It is not meant to be a complete or exact representation of reality, but rather a tool for analyzing and understanding economic phenomena.

Question 6

Instrumental variables requires that the variable not be correlated with the outcome variable

Accepted Answer

Instrumental variables must be correlated with the endogenous explanatory variable but not with the error term of the outcome equation, ensuring they do not directly affect the outcome variable.

Question 7

Equilibrium in the market is where supply is equal to demand.

Accepted Answer

Equilibrium is defined as the point where the quantity of a product or service supplied by producers is equal to the quantity demanded by consumers. Therefore, supply and demand are balanced at equilibrium.

Question 8

Why might the consequences of imposing a tax on harmful fast foods not adhere to theory?

Accepted Answer

The answer of Why might the consequences of imposing a...

Question 9

Discuss the concept in econometrics that states,"garbage in ...garbage out."

Accepted Answer

The answer of Discuss the concept in econometrics that states,"garbage...

Question 10

Causation and Correlation are generally the same thing.

Accepted Answer

Causation and correlation are not the same thing. Correlation refers to a relationship or association between two variables or sets of data, whereas causation refers to a relationship in which one variable causes a change or effect in another variable. Correlation does not necessarily imply causation.

Question 11

Use the following function for elasticity: = -(1/s)(P/X),where s is the slope of the demand curve,P is the price,and X is the quantity demanded,to find elasticity when demand is X_d= 20-(1/5)P when the price of good X is 30.

Accepted Answer

The answer of Use the following function for elasticity: ...

Question 12

Suppose that a competitive firm's marginal cost of producing output q is given by MC=2+2q.Assume that the market price of the firm's product is $13.
A)What level of output will the firm produce?
B)What is the firm's producer surplus?

Accepted Answer

The answer of Suppose that a competitive firm's marginal cost...

Question 13

It is possible that two different economists can examine the same situation,such as school funding,and reach entirely different conclusions.Why is this so?

Accepted Answer

The answer of It is possible that two different economists...

Question 14

Imagine that the demand for concert tickets can be characterized by the equation X_d = 14 - P/3.The supply of tickets can be written as X_s= P/4.Find the equilibrium price and quantity of concert tickets.

Accepted Answer

The answer of Imagine that the demand for concert tickets...

Question 15

"Since the social sciences are not like the natural sciences,experiments are a waste of time." Comment on the above statement.

Accepted Answer

The answer of "Since the social sciences are not like...

Quiz 2: Tools of Positive Analysis