INTRODUCTION TO ECONOMETRICS
CERTIFICATION EVALUATION COMPLETE
QUESTIONS AND SOLUTIONS GRADED
APLUS
●● A data set that has observations on one entity at multiple points in
time is classified as _____.
Select one:
a. time series data
b. panel data
c. cross-section data
d. flow data
Answer: a. time series data
●● Consider the model Qd = f(P,Ps,Pc,INC) where Qd is quantity
demanded of a particular product per month, P is the price of the
product, Ps is the price of substitutes, Pc is the price of complements,
and INC is monthly income. This equation represents _____.
Select one:
a. an interval forecast
b. an econometric model
c. a non-linear model
d. an economic model
,Answer: an economic model
●● Economic theory provides a basis for which variables are relevant
and should be included in an econometric model. But econometrics
provides tools to estimate _____ which tells us _____.
Select one:
a. variables; the probability of a specific outcome
b. causality; why it happens that way
c. a parameter; how much or to what degree things change
d. a model; the functional form that should be used
Answer: a parameter; how much or to what degree things change
●● Of the following steps in conducting empirical economic research,
which one should be performed last?
Select one:
a. Build an economic model guided by economic theory.
b. Evaluate and analyze the consequences and implications of the
results.
c. Estimate parameters and test hypotheses.
d. Find appropriate data that can be used for estimation.
Answer: Evaluate and analyze the consequences and implications of the
results.
,●● Refer to the equation QS = β1 + β2P + β3Pr + β4PS + β5TAX + e,
where QS is annual quantity supplied, P is the price of the product, Pr is
the price of resources, PS is the price of goods that are substituted in
production, and TAX is the excise tax on the product. This equation is
_____.
Select one:
a. an economic model
b. an econometric model
c. a market model
d. a non-linear model
Answer: an econometric model
●● Refer to the equation QS = β1 + β2P + β3Pr + β4PS + β5TAX + e,
where QS is annual quantity supplied, P is the price of the product, Pr is
the price of resources, PS is the price of goods that are substitutes in
production, and TAX is the excise tax on the product. In this equation,
β1represents _____
Select one:
a. a parameter to be estimated
b. the random error term
c. the equilibrium quantity
d. the predicted quantity supplied
Answer: a parameter to be estimated
, ●● Suppose you stand outside a store and randomly give some shoppers
coupons as they enter while other shoppers receive none. You then
record how much each shopper spends in the store. The data you collect
is _____ data.
Select one:
a. survey
b. experimental
c. selective
d. random
Answer: experimental
●● Suppose you wish to study the effect on employment of the increase
in the minimum wage in Seattle, WA and you use employment in
Portland, OR as a control group since there was no increase in the
minimum wage there. The type of data you would be analyzing is called
_____ data.
Select one:
a. survey
b. quasi-experimental
c. pure experimental
d. random
Answer: quasi-experimental
CERTIFICATION EVALUATION COMPLETE
QUESTIONS AND SOLUTIONS GRADED
APLUS
●● A data set that has observations on one entity at multiple points in
time is classified as _____.
Select one:
a. time series data
b. panel data
c. cross-section data
d. flow data
Answer: a. time series data
●● Consider the model Qd = f(P,Ps,Pc,INC) where Qd is quantity
demanded of a particular product per month, P is the price of the
product, Ps is the price of substitutes, Pc is the price of complements,
and INC is monthly income. This equation represents _____.
Select one:
a. an interval forecast
b. an econometric model
c. a non-linear model
d. an economic model
,Answer: an economic model
●● Economic theory provides a basis for which variables are relevant
and should be included in an econometric model. But econometrics
provides tools to estimate _____ which tells us _____.
Select one:
a. variables; the probability of a specific outcome
b. causality; why it happens that way
c. a parameter; how much or to what degree things change
d. a model; the functional form that should be used
Answer: a parameter; how much or to what degree things change
●● Of the following steps in conducting empirical economic research,
which one should be performed last?
Select one:
a. Build an economic model guided by economic theory.
b. Evaluate and analyze the consequences and implications of the
results.
c. Estimate parameters and test hypotheses.
d. Find appropriate data that can be used for estimation.
Answer: Evaluate and analyze the consequences and implications of the
results.
,●● Refer to the equation QS = β1 + β2P + β3Pr + β4PS + β5TAX + e,
where QS is annual quantity supplied, P is the price of the product, Pr is
the price of resources, PS is the price of goods that are substituted in
production, and TAX is the excise tax on the product. This equation is
_____.
Select one:
a. an economic model
b. an econometric model
c. a market model
d. a non-linear model
Answer: an econometric model
●● Refer to the equation QS = β1 + β2P + β3Pr + β4PS + β5TAX + e,
where QS is annual quantity supplied, P is the price of the product, Pr is
the price of resources, PS is the price of goods that are substitutes in
production, and TAX is the excise tax on the product. In this equation,
β1represents _____
Select one:
a. a parameter to be estimated
b. the random error term
c. the equilibrium quantity
d. the predicted quantity supplied
Answer: a parameter to be estimated
, ●● Suppose you stand outside a store and randomly give some shoppers
coupons as they enter while other shoppers receive none. You then
record how much each shopper spends in the store. The data you collect
is _____ data.
Select one:
a. survey
b. experimental
c. selective
d. random
Answer: experimental
●● Suppose you wish to study the effect on employment of the increase
in the minimum wage in Seattle, WA and you use employment in
Portland, OR as a control group since there was no increase in the
minimum wage there. The type of data you would be analyzing is called
_____ data.
Select one:
a. survey
b. quasi-experimental
c. pure experimental
d. random
Answer: quasi-experimental
