Following Alfred Nobel's will, there are five Nobel Prizes awarded each year. These are for outstanding achievements in Chemistry, Physics, Physiology or Medicine, Literature, and Peace. In 1968, the Bank of Sweden added a prize in Economic Sciences in memory of Alfred Nobel. You think of the data as describing a population, rather than a sample from which you want to infer behavior of a larger population. The accompanying table lists the joint probability distribution between recipients in economics and the other five prizes, and the citizenship of the recipients, based on the 1969-2001 period.

Joint Distribution of Nobel Prize Winners in Economics and Non-EconomicsDisciplines, and Citizenship, 1969-2001 (Table 1)

U.S. Citizen

(Y= 0)

Non= U.S. Citizen

(Y= 1)

Total

Economics Nobel Prize (X= 0)

0.12

0.05

0.17

Physics, Chemistry, Medicine, Literature, and Peace Nobel Prize (X= 1)

0.34

0.49

0.83

Total

0.46

0.54

1.00

Question 1(1 point)

Refer to Table 1. ComputeE(Y).

Question 1 options:

0.6000

0.1200

0.8300

0.5400

Question 2(1 point)

Refer to Table 1. CalculateE(Y|X=1)

Question 2 options:

0.3641

0.5400

0.4815

0.5903

Question 3(1 point)

Refer to Table 1. A randomly selected Nobel Prize winner reports that he is a non-U.S. citizen (Y=1). What is the probability that this genius has won the Economics Nobel Prize (X=0)?

Question 3 options:

0.1700

0.5903

0.0926

0.4900

Question 4(1 point)

Refer to Table 1. Aretwo categories U.S. Citizen (Y=0) and Economics Nobel Prize winner

(X=0) independentoutcomes?

Question 4 options:

TrueFalse

Question 5(1 point)

The probability of an outcome

Question 5 options:

equals the sample mean divided by the sample standard deviation.

equalsMN, whereMis the number of occurrences andNis the population size.

is the number of times that the outcome occurs in the long run.

is the proportion of times that the outcome occurs in the long run.

Question 6(1 point)

Analyzing the behavior of unemployment rates across U.S. states in March of 2006 is an

example of using

Question 6 options:

panel data.

time series data.

experimental data.

cross-sectional data.

Question 7(1 point)

Studying inflation in the United States from 1970 to 2006 is an example of using

Question 7 options:

randomized controlled experiments.

cross-sectional data.

panel data.

time series data.

Question 8(1 point)

Econometrics can be defined as follows with the exception of

Question 8 options:

measuring the height of economists.

the science of testing economic theory.

a set of tools used for forecasting future values of economic variables.

fitting mathematical economic models to real-world data.

Question 9(1 point)

Most economic data are obtained

Question 9 options:

by calibration methods.

through randomized controlled experiments.

through textbook examples typically involving ten observation points.

by observing real-world behavior.

Question 10(1 point)

An estimator of the population parameter is more efficient when compared to another estimator , if and only if,

Question 10 options:

Cumulative density function of is flatter than that of the other .

and are both unbiased but var () < var ().

has a smaller variance.

E () > E ()

Question 11(1 point)

Among all unbiased estimators,, the weighted average ofY1,Y2..,Yn,is

Question 11 options:

the most efficient estimator ofY.

the only consistent estimator ofY.

a number which, by definition, cannot have a variance.

the most unbiased estimator ofY.

Question 12(1 point)

The correlation coefficient

Question 12 options:

is close to one ifXcausesY.

takes on a high value if you have a strong nonlinear relationship.

is a measure of linear association.

lies between zero and one.

Question 13(2 points)

IfY=0+1X+ , then its equivalent equation is

=1+

where= (Y-)and= (X-)

Question 13 options:

TrueFalse

Question 14(1 point)

Is the following function linear in parameter, or variable, or both?

Y = 0+ 1ln X + u

Question 14 options:

Linear in parameter

Linear in variable

Nonlinear in both

Linear in both

Question 15(1 point)

Is the following function linear in parameter, or variable, or both?

Y = 0+ ln1X + u

Question 15 options:

Nonlinear in both

Linear in variable

Linear in parameter

Linear in both

Question 16(1 point)

Is the following function linear in parameter, or variable, or both?

Y = 0+ 1X + u

Question 16 options:

Linear in both

Linear in variable

Nonlinear in both

Linear in parameter

Question 17(1 point)

1. Is the following function linear in parameter, or variable, or both?

Y = 0+ (1)2X + u

Question 17 options:

Linear in parameter

Linear in variable

Nonlinear in both

Linear in both

Question 18(1 point)

Is the following function linear in parameter, or variable, or both?

Y = 0+ (1)2X2+ u

Question 18 options:

Linear in variable

Linear in parameter

Nonlinear in both

Linear in both

The following is a dataset on Y and X variables. Use your calculator and appropriate formulas to calculate and answer the questions 1-8.Choose the correct answers from given choices. (Table 2)

Y

X

13

9

10

7

8

6

18

11

11

7

Total ()

Question 19(2 points)

Use the data in Table 2 to estimate regression equation =0+1X, with Y as dependent and X as the independent variable. Then select the correct estimated equation from the following choices.

Question 19 options:

= -3 + 1.875 X

= 3 - 1.875 X

= -3 - 1.875 X

= 3 - 1.875 X

Question 20(2 points)

Refer to Table 2. Calculate TSS (Total Sum of Squares)

Question 20 options:

40

60

55

58

Question 21(2 points)

Refer to Table 2. Calculate ESS (Explained or Regression Sum of Squares)

Question 21 options:

60.23

53.25

58.10

56.25

Question 22(2 points)

Refer to Table 2. Calculate RSS (Unexplained or Residual Sum of Squares)

Question 22 options:

2.13

1.10

1.75

1.35

Question 23(2 points)

Refer to Table 2. Calculate SE (1)

Question 23 options:

0.1865

0.1909

0.2101

0.1342

Question 24(2 points)

Refer to Table 2. Calculate the COV (0,1)

Question 24 options:

-0.3151

-0.2920

0.2716

-0.2716

Question 25(2 points)

Refer to Table 2. Interpret the estimated value of1

Question 25 options:

If the value of the variable increases by one unit, value of X will increase by 1.875 units

If the value of the variable X increases by one unit, value of will decrease by 1.875 units

If the value of the variable X increases by one unit, value of will increase by 1.875 units

If the value of the variable X decreases by one unit, value of will increase by 1.875 units

Question 26(2 points)

Refer to Table 2. Calculate the value of coefficient of determination (R2)

Question 26 options:

0.9698

-0.5671

0.8700

1.1200

Q#6: In the linear consumption function:= b0+ b1Income,the (estimated)marginal propensity to consume(MPC) out of income is simply the slope, b1,while theaverage propensity to consume(APC) is/Income = (b0/ Income + b1).

Using observations for 100 families on annual income and consumption (both measured in dollars), the following equation is obtained.

= -124.84+ 0.853 Income

n = 100, R2=0.692

Question 27(1 point)

Refer to Q#6. Interpret the slope in this equation.

Question 27 options:

If the income increases by one dollar,will increase by 85.3dollars

If theincreases by one dollar,will increase by 85.3cents

If the income increases by one dollar,will decrease by 85.3cents

If the income increases by one dollar,will increase by 85.3cents

Question 28(1 point)

Refer to Q#6. Interpret the slope and R2values

Question 28 options:

The estimated regression equation explains 69.2% variation in

The estimated regression equation explains 69.2% variation in income

The estimated regression equation does not explain 69.2% variation in income

The estimated regression equation does not explain 69.2% variation in

Question 29(1 point)

Refer to Q#6.What is the estimated value of MPC?

Question 29 options:

-124.0

0.853

0.124

-0.853

Question 30(1 point)

Refer to Q#6. What is the estimated value of APC?

Question 30 options:

(-124/Income) - 0.853

(-124 + 0.853)/Income

(-124/Income) + 0.853

(-124 - 0.853)/Income

Question 31(1 point)

Refer to Q#6. What is the predicted consumption when family income (Income) is $30,000?

Question 31 options:

$26,200.16

$24,365.20

$25,465.20

$23,465.00