Advanced Econometrics (ECS4863)

Which of the following public policies is an example of a price ceiling?
 

a.

Support prices for agricultural commodities

b.

Minimum wage laws

c.

Rent control program
 

d.

all the statements are correct

If indifference curves cross, then:

a.

the assumption of a diminishing marginal rate of substitution is violated
 

b.

the assumption of transitivity is violated
 

c.

the assumption of completeness is violated
 

d.

consumers minimise their satisfaction

Explain in your words how you test serial correlation with strictly exogenous variables

GIVE INTRODUCTION FOR THE TOPIC “HETEROSKEDASTICITY ”WITH REFERENCES WERE APPLICABLE

Cheap as chips? In SA, not quite, if they’re frozen A trade consultancy has called for the scrapping of import duties on frozen fries because of rising food inflation. Source: https://www.dailymaverick.co.za/article/2022-11-03-cheap-as-chips-in-sa- not-quite-if-theyre-frozen 1.1 Taking the article into consideration and with the aid of a graph, critically discuss import duties as a protectionist tool and explain how they may lead to food price inflation in this case.

(c) Researchers used a logit model to determine car ownership as a function of the logarithm of income. Car ownership was a binary variable: Y=1 if a household owns a car, zero otherwise.
IncomeLiln447562.066231.3ˆ+−=
)35.3(−=t ()05.4
()462.1812=dfχ ()0000.0=pvalue
Where iLˆ = estimated logit and where incomeln is the logarithm of income. The 2χmeasures the goodness of fit of the model.
(i) Interpret the estimated logit model. (2)
(ii) Obtain the expression for the probability of car ownership. (2)
(iii) What is the probability that a household with an income of R200 000 will own a car? (3)
(iv) Comment on the statistical significance of the estimated logit model.