Questions and Answers of Essentials Of Econometrics

Redo the preceding exercise, this time assuming that λ = −0.2.Preceding ExerciseConsider the following model of wage adjustment in the labor market:where We is the equilibrium wage rate, and λ is
Use the data in the preceding exercise to calculate the percentage change in government saving and the percentage change in GDP each year from 1990 through 2010. When you calculate the percentage
Use the data in the preceding exercise to make side-by-side boxplots of the returns for the 25 stocks with the highest P/Es and the 25 stocks with the lowest P/Es. What differences do you observe in
The traditional Indian game Tong is similar to the odd-or-even game described in the preceding exercise, except that each player can show one, two, or three fingers. If each possibility is equally
Continuing the preceding exercise, another random sample of 16 players is selected.Does a 95 percent confidence interval using these 16 observations include the actual value of the population mean,
The following data are the median ZIP-code incomes of the daughters of the random sample of 25 mothers in the preceding exercise. Calculate a 95 percent confidence interval for the population mean.
Using the data in Exercises 6.22 and 6.23, the following data are the differences between each daughter’s ZIP-code income and her mother’s ZIP-code income.Calculate a 95 percent confidence
A histogram of ZIP-code income is skewed right. Why do you suppose this is? If ZIP-code income is skewed right, can it also be normally distributed? If ZIP-code income is not normally distributed, is
Explain why you either agree or disagree with each of these interpretations of the confidence interval calculated in the preceding exercise.a. 95 percent of healthy adults have temperatures in this
Which of the following assumptions were used in calculating the P value in the preceding exercise?a. Temperatures for healthy adults are normally distributed.b. These 50 observations are a random
Analogous to the preceding exercise, the data in Table 7.3 for deceased MLB players were used to investigate the research hypothesis that players with negative initials (like PIG) do not live as
The follow-up study described in the previous exercise also looked at MLB players whose first or last initial was D. For MLB players born between 1875 and 1930, there were 53 birth years with the
Use the data in Exercise 6.24 to determine the two-sided P value for a test of the null hypothesis that the population mean of the differences between the daughter’s income and her mother’s
Use the data in Exercise 6.21 to calculate the two-sided P value for a test of the null hypothesis that the population mean is 25.53.Exercise 6.21Continuing the preceding exercise, another random
Use the data in Exercise 6.23 to calculate the two-sided P value for a test of the null hypothesis that the population mean is 40,064—which is, in fact, the actual value of the population mean. If
Use the estimated equation reported in the preceding exercise to answer these questions:a. Does the estimated coefficient of X have a plausible value?b. Is the estimated coefficient of X
Use the data in the two preceding exercises to compare the least squares lines for men and women.a. Which line has the larger slope?b. Do the lines cross? Where?c. Are the predicted values of Y for X
For each of the following studies, identify the type of graph (histogram, time series graph, or scatter diagram) that would be the most appropriate. (You can use more than one graph of each type, for
For each of the following studies, identify the type of graph (histogram, time series graph, or scatter diagram) that would be the most appropriate. (You can use more than one graph of each type, for
For each of the following studies, identify the type of graph (histogram, time series graph, or scatter diagram) that would be the most appropriate. (You can use more than one graph of each type, for
For each of the following studies, identify the type of graph (histogram, time series graph, or scatter diagram) that would be the most appropriate. (You can use more than one graph of each type, for
Use the data in Table 1.4 to make a histogram of the U.S. dollar prices of a Big Mac in these 20 countries. Use these intervals for the prices: 1–2, 2–3, 3–4, 4–5, 5–8. United States
Use the data in Table 1.4 to make a histogram of the U.S. dollar prices of a Big Mac in these 20 countries. Use these intervals for the prices: 1–3, 3–4, 4–5, 5–8. United States Argentina
Use the data in Table 1.4 for the 19 countries other than the United States to make a histogram of the U.S. dollar prices of a Big Mac. Use these intervals for the prices:1.41–2.41, 2.41–3.41,
Use these household taxable income data (in thousands of dollars) to make a histogram, using intervals equal to the federal income tax brackets shown in Table 2.5: 10, 20, 30, 40, 50, 60, 70, 80, 90,
Use these household taxable income data (in thousands of dollars) to make a histogram, using intervals equal to the federal income tax brackets shown in Table 2.5: 15, 23, 32, 37, 48, 48, 75, 80,
Use these household taxable income data (in thousands of dollars) to make a histogram, using intervals equal to the federal income tax brackets shown in Table 2.5: 10, 15, 20, 20, 30, 35, 40, 40, 50,
Use these household taxable income data (in thousands of dollars) to make a histogram, using intervals equal to the federal income tax brackets shown in Table 2.5: 12, 15, 23, 24, 32, 37, 37, 37, 48,
Use the tax brackets in Table 2.5 to calculate the taxes and average tax rates for each of these incomes (in thousands of dollars) for these ten married couples filing a joint tax return: 10, 20, 30,
Use the tax brackets in Table 2.5 to calculate the taxes and average tax rates for each of these incomes (in thousands of dollars) for these ten married couples filing a joint tax return: 15, 23, 32,
Do not collect any data, but use your general knowledge to draw a rough sketch of a histogram of the ages of the students at your school. Be sure to label the horizontal and vertical axes.
Do not collect any data, but use your general knowledge to draw a rough sketch of a histogram of the first-year salaries of last year’s graduates from your school. Be sure to label the horizontal
Use the data in Tables 1.9 and 1.10 to make a time series graph of real average hourly earnings. Table 1.9: Consumer Price Index (CPI = 100 in 1967) 1970 1980 1990 2000 2010 116.3 246.8 391.4 515.8
Use the data in Table 1.11 to make a time series graph of the real cost of mailing a letter. Table 1.11: Cost of Mailing a First-Class Letter Date Introduced First-Class Postage Rates ($) CPI
Use the data in Table 1.2 to make a scatterplot of income and spending. Does there seem to be a close positive relationship? Table 1.2: Family Income and Spending, 1935-1936 [12] Income Range ($)
Explain why you think the following pairs of data are positively related, negatively related, or essentially unrelated. If you think there is a causal relationship, which is the explanatory
Explain why you think the following pairs of data are positively related, negatively related, or essentially unrelated. If you think that there is a relationship, which is the explanatory variable?a.
Table 2.10 shows the percentage of the Jewish population of various ages in Germany in 1928 and in 1959 and of a theoretical stationary population that is neither growing nor contracting. Make three
A survey of the prices of houses recently sold in Indianapolis obtained these data.Display these data in a histogram. Sale Price ($) 75,000100,000 100,000-150,000 150,000-200,000 Number of Houses 10
A survey of the prices of houses recently sold in Boston obtained these data. Display these data in a histogram. Sale Price ($) 100,000-200,000 200,000-500,000 500,000-1,000,000 Number of Houses 10
Use the test scores in Exercise 1.8 two make two histograms, one using the first-grade scores and the other the eighth-grade scores. In each case, use the intervals 0–9, 10–19,…, 90–99.
Use a histogram with intervals 0–9.99, 10–14.99, 15–19.99, and 20–34.99 to summarize the data in Table 2.11 on annual inches of precipitation from 1961 to 1990 at the Los Angeles Civic
From the 30 stocks in the Dow Jones Industrial Average, students identified the ten stocks with the highest dividend/price (D/P) ratio and the ten stocks with the lowest D/P ratio. The percentage
Plutonium has been produced in Hanford, Washington, since the 1940s, and some radioactive waste has leaked into the Columbia River. A 1965 study of cancer incidence in nearby communities [18]
The Soviet Antarctica Expeditions at Vostok analyzed an ice core that was 2,083 meters long to estimate the atmospheric concentrations of carbon dioxide during the past 160,000 years. Table 2.13
Table 2.14 shows U.S. federal government saving and GDP (in billions of dollars).Government saving is government income minus government expenditures; a positive value represents a budget surplus, a
A study of the average sentence length of British public speakers produced the data in Table 2.15. Plot these data using a horizontal axis from 1500 to 2200 and a vertical axis from 0 to 80. Draw a
In 1974, Congress tried to reduce U.S. fuel usage by imposing a nationwide 55 miles per hour speed limit. As time passed, motorists increasingly disregarded this speed limit; and in 1987, the speed
In 1992, two UCLA professors compared the trends over time in male and female world records in several running events. Their data (in minutes) for the marathon, a race covering 42,195 meters, are in
What is wrong with Figure 2.34, showing the distribution of family income? How would you define the middle class? Under $5,000 $5,000-$9,999 $10,000-$14,999 $15,000-$24,999 $25,000-$34,999
What is wrong with the histogram in Figure 2.35? 0.3 0.2 0.1 0 0 1 2 3 4 5 Figure 2.35
What is wrong with the histogram in Figure 2.36? 0.4 0.3 0.2 0.1 0.0 -0.1 0 1 2 3 4 5 6 7 8 Figure 2.36
What is wrong with the histogram in Figure 2.37? 0.4 0.3 0.2 0.1 ot 0 1 2 3 4 5 6 7 8 9 10 Figure 2.37
What is wrong with the histogram in Figure 2.38? 0.2- 0.1- 0.0+ 10 12 14 16 18 20 Figure 2.38
What is wrong with the histogram in Figure 2.39 that was constructed from annual rainfall data for the years 1901 to 2000? (Density is the rainfall for each year divided by the total rainfall for all
Explain why Figure 2.40, a graph of the Dow Jones Industrial Average of stock prices on January 27, 1997, gives a misleading visual impression of the volatility of stock prices that day. 6,700 6,690-
What is misleading about Figure 2.41, showing the increase in the cost of mailing a letter in the U.S. between 1971 and 2009? Cents 45 40 35 30 25 20 15 10 5 0 71 74 75 78 81 81 85 88 91 95 99 01 02
Modern-day adult British women experience a pronounced loss of bone density as they grow older, contributing to an increasing incidence of osteoporotic hip fractures. During the restoration of a
What is wrong with Figure 2.43 of Table 2.18’s quarterly earnings per share data for Gordon Jewelry, a leading retail jewelry shop? Redraw the graph correctly, then describe any patterns you
Identify what is misleading about Figure 2.44, showing a precipitous decline in 2011 in the number of passengers carried by three major airlines. Passengers 180 160 140 120 100 80 60 2009 2010 First
What is misleading about Figure 2.45, illustrating the fact the purchasing power of the U.S. dollar fell by 50 percent between 1986 and 2010? FEDERAL RESERVE NOTES THE UNITED STATES OF AMERI THI
What is misleading about Figure 2.46, showing that the number of U.S. families with annual incomes of $100,000 or more exploded between 1980 and 1993? Households, millions 5 + 2 1967 1973 1980 1993
What is misleading about Figure 2.47, comparing the populations of three cities? Shanghai 14 million Cairo 7 million Figure 2.47 Berlin 3.5 million
What is misleading about Figure 2.48, showing a leveling off of U.S. federal tax revenue? 2000 1995 1990 1985 1980 1975 1970 1965 1960 0 200 400 600 800 1,000 1,200 1,400 Federal tax receipts,
Identify several problems that prevent Figure 2.49 from conveying useful information. Poll shows little change in safety Figure 2.49 1 = Very unsafe 2 = Pretty unsafe 3 = Okay 4 = Pretty safe 5 =
What is misleading about Figure 2.50, which shows a large increase in a company’s annual sales? Sales, dollars 51,000,000 50,000,000 0 2008 Figure 2.50 2009 2010
Which of these data sets has a higher mean? Higher median? Higher standard deviation? (Do not do any calculations. Just look at the data.) X Y 1 75 5 24 4 4 +2 3 3 5C 5 1
Which of these data sets has a higher mean? Higher median? Higher standard deviation? (Do not do any calculations. Just look at the data.) Y xx 1 3 3 22 4 4 56
Albert Michelson’s 1882 measurements of the speed of light in air (in kilometers per second) were as follows:Calculate the mean, median, and 10-percent trimmed mean. Which is closest to the value
In 1798, Henry Cavendish made 23 measurements of the density of the earth relative to the density of water :Calculate the mean, median, and 10-percent trimmed mean. Which is closest to the value
Twenty-four female college seniors were asked how many biological children they expect to have during their lifetimes. Figure 3.9 is a histogram summarizing their answers: Of these four numbers (0,
Thirty-five male college seniors were asked how many biological children they expect to have during their lifetimes. Figure 3.10 is a histogram summarizing their answers:Of these four numbers (0,
Suppose that you have ten observations that have a mean of 7, a median of 6, and a standard deviation of 3. If you add 5 to the value of each observation, what are the new values of thea. Mean?b.
Suppose that you have ten observations that have a mean of 7, a median of 6, and a standard deviation of 3. If you subtract 2 from the value of each observation, what are the new values of thea.
Suppose that you have ten observations that have a mean of 7, a median of 6, and a standard deviation of 3. If you double the value of each observation, what are the new values of thea. Mean?b.
Suppose that you have ten observations that have a mean of 7, a median of 6, and a standard deviation of 3. If you halve the value of each observation, what are the new values of thea. Mean?b.
Identify the apparent statistical mistake in this commentary :The median cost of a house in [Duarte, California] is a whopping $4,276,462, making it the most expensive housing market in the country.
Roll four six-sided dice ten times, each time recording the sum of the four numbers rolled. Calculate the mean and median of your ten rolls. Repeat this experiment 20 times. Which of these two
Use the test scores in Exercise 1.8 to calculate the average score for each grade level and then make a time series graph using these average scores.Exercise 1.8Table 1.12 lists the reading
An old joke is that a certain economics professor left Yale to go to Harvard and thereby improved the average quality of both departments. Is this possible?
Ann Landers, an advice columnist, once wrote “Nothing shocks me anymore, especially when I know that 50 percent of the doctors who practice medicine graduated in the bottom half of their class”
When is the standard deviation negative?
There was a players’ strike in the middle of the 1981 baseball season. Each division determined its season winner by having a playoff between the winner of the first part of the season, before the
Use the test scores in Exercise 1.8 two make two boxplots, one using the first-grade scores and the other the eighth-grade scores. Summarize the main differences between these two boxplots.Exercise
Exercise 2.26 shows the percentage returns for the ten Dow stocks with the highest dividend/price (D/P) ratio and the ten Dow stocks with the lowest D/P ratio. Display these data in two side-by-side
Table 1.4 shows the U.S. dollar prices of Big Mac hamburgers in 20 countries. Use a boxplot to summarize these data. United States Argentina Australia Brazil Britain China Big Mac Price In Local
Figure 3.11 shows two boxplots. Which data set has the higher median? The higher standard deviation? 10 9 8 7 6 5 4 3 2 1 0 1 Figure 3.11 2
Figure 3.12 shows two boxplots. Which data set has the higher median? The higher mean? The higher standard deviation? 10 9 8 7 6- 5 4- 3- 2 1 0 1 Figure 3.12 2
Draw a freehand sketch of two side-by-side boxplots, one the boxplot shown in Figure 3.13 and the other the same boxplot if 2 is added to the value of each observation in that boxplot. 12 12 11 10 9
Draw a freehand sketch of two side-by-side boxplots, one the boxplot shown in Figure 3.14 and the other the same boxplot if all the observations in that boxplot are multiplied by 2. 12 11- 10 9- 8-
Here are data on the number of U.S. households (in millions) of different sizes in 2000:a. Looking at the 116 million households, ordered by size, what is the size of the median household?b. Looking
Joanna is staring work with an annual salary of $40,000. If her salary increases by 5 percent a year, what will her salary be 40 years from now? If prices increase by 3 percent a year, how much
Treasury zeros pay a fixed amount at maturity. For example, a Treasury zero could be purchased on January 2, 2009, for $445.19 and might be worth $1,000 when it matures 25 years later. What is the
A stock’s price/earnings (P/E) ratio is the per-share price of its stock divided by the company’s annual earnings per share. The P/E ratio for the stock market as a whole is used by some analysts
In the early 1970s, many investors were infatuated by the Nifty 50—a group of 50 growth stocks that were thought to be so appealing that they should be bought and never sold, regardless of price.
Use the data in Exercise 3.29 to make a scatter diagram with the P/E ratio on the horizontal axis and the return on the vertical axis. Does there appear to be a positive relationship, negative
Table 3.5 shows ringer percentages for Mary Ann Peninger at the 2000 Women’s world horseshoe championships, when she threw first and when she threw second. For example, in the second game, she
Use the data in Table 3.2 to calculate the annual rate of increase in the CPI over the 10-year period from December 2000 to December 2010. 1981 8.9 1996 3.3 1982 3.8 1997 1.7 1983 3.8 1998 1.6 1984
Explain the error in the conclusion reached by a security analyst:The Dow Jones Industrial Average peaked at 381.17 during September 3, 1929. The socalled Great Crash pushed this index down 48% by
Vincent Van Gogh sold only one painting during his lifetime, for about $30. In 1987, a sunflower still life he painted in 1888 sold for $39.85 million, more than three times the highest price paid

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