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Department of Economics
ECON 414 Introduction to Econometrics
M. Safarzadeh
HW #1
Student Name:_____________________
Solve the following problems. Please write the answers in the spaces provided on the HW.
Attach your work to the HW. Answers with no supporting calculations will not receive any
credit.
1. Given the distribution of the following variable (X), find the mean, E(X), and the variance of
the variable V(X).
X:
Probability:
10,
.1,
6,
.15,
5,
.3,
8,
.2,
a. E(X) =
__________________
3,
.05,
4,
.1,
4.5
.1
Y:
2, 4, 6, 8, 15
P(Y): .1, .05, .15, .4, .3
V(X) _________________
V(Y) _________________
f. Find E(X2)__________________
3. Given that E(X) = 5, E(Y) = 8, E(X2) = 68, E(Y2) = 75 and rx,y = .75, find the followings.
a. Find V(X) _________________
f. Find E(3X2)__________________
4. A random sample of 100 observations from a population has a mean of 60 and a population
standard deviation of 18.
a. What is the point estimate of the population mean? .......................................
b. What is the interval estimate of the population mean (=.05)? .
c. What is the point estimate of the population variance? .............................
d. What is the interval estimate of the population variance (=.05)? .
e. What is the point estimate of the standard deviation of the population? ........................
f. What is the point estimate of the standard deviation of the sample mean? ........................
5. Ten observations on the students number of hours of study a day and their average grade for
the quarter has resulted in the following data:
Hours of Study:
Grade:
3
2
8
4
5
3
2
3
3
2
5
4
7
3
9
3
1
2
7
4
Q = 1360
L2 = 103680
Q2 = 1836000
LQ = 436000
1- Do an OLS estimate of the production function and find the estimated coefficients.
2- Find the relevant statistics of the regression and write the results in standard form.
3- XYZ is part of an industry that the marginal product of labor in the industry is 4 units.
Do a hypothesis test (at the .05 level) that XYZs marginal product of labor is no
different from the industrys.
7. Prove that the estimated residuals from the linear regression and the corresponding sample
values of X are uncorrelated. That is, Xiei = 0, where ei is the estimated values of regression
error.
d- What will be the effect on the standard error of the coefficients, the t, F, and R2 statistics
if the variables are scaled by a factor of k? __________________________________