600,000 students in 79 countries take a PISA test every three years to evaluate their learning in reading, math, and science. Students in the Beijing-Shanghai-Jiangsu-Zhejiang regions in China scored the highest average scores in all three subjects in 2018. Canada ranked around 12^th overall but has had steadily declining scores in math and science. We have data on average math scores and characteristics of 500 school districts across Canada. This problem asks you to build up a regression model to look for factors that affect average math test scores in various school districts in Canada.

I run a basic regression equation that explains math scores (SCORE) as a function of:
1. STR = the student teacher ratio. (number of students per teacher)
2. SPEND = government spending per student in the school district in dollars per student.
3. HIESL= a dummy variable=1 if the percentage of students learning English as a new language is above 20% and =0 if it is below 20%.
The regression also includes the usual constant term.

There is a categorical variable called PROVINCE for the province of the school district. This variable =1 for Ontario, =2 for Quebec, =3 for Alberta, and =4 for British Columbia.

There is also a categorical variable called INCOME which is the average per capita income of households in the school district. INCOME = 1 if the district has average per capital income below $40000, =2 if the district has per capita income between $40000 and $60000, =3 if the district has per capita income >= $60000.

How do I add PROVINCE and INCOME into my regression model? Which specification is correct?

• A.

  SCORE = b₂STR + b₃SPEND + b₄HIESL + b₅ON + b₆QC + b₇BC + b₈AB + b₉INC1 + b₁₀INC2 + b₁₁INC3

  where
  ON = 1 if the district is in Ontario and 0 otherwise
  QC = 1 if the district is in Quebec and 0 otherwise
  BC = 1 if the district is in BC and 0 otherwise
  AB = 1 if the district is in Alberta and 0 otherwise
  INC1 = 1 if the district is the low income range and 0 otherwise
  INC2 = 1 if the district is the middle income range and 0 otherwise
  INC3 = 1 if the district is the high income range and 0 otherwise

• B.

  SCORE = b₁ +b₂STR + b₃SPEND + b₄HIESL + b₅PROVINCE + b₆INCOME

  where PROVINCE takes values 1 to 4
  and INCOME takes values 1 to 3.

• C.

  SCORE = b₁ + b₂STR + b₃SPEND + b₄HIESL +  b₅ON + b₆QC + b₇BC + b₈AB + b₉INC1 + b₁₀INC2 + b₁₁INC3

  where
  ON = 1 if the district is in Ontario and 0 otherwise
  QC = 1 if the district is in Quebec and 0 otherwise
  BC = 1 if the district is in BC and 0 otherwise
  AB = 1 if the district is in Alberta and 0 otherwise
  INC1 = 1 if the district is the low income range and 0 otherwise
  INC2 = 1 if the district is the middle income range and 0 otherwise
  INC3 = 1 if the district is the high income range and 0 otherwise

• D.

  SCORE = b₁ +b₂STR + b₃SPEND + b₄HIESL + b₅ON + b₅QC + b₆BC + b₇INC2 + b₈INC3

  where
  ON = 1 if the district is in Ontario and 0 otherwise
  QC = 1 if the district is in Quebec and 0 otherwise
  BC = 1 if the district is in BC and 0 otherwise
  INC2 = 1 if the district is the middle income range and 0 otherwise
  INC3 = 1 if the district is the high income range and 0 otherwise

• E.

  SCORE = b₁ +b₂STR + b₃SPEND + b₄HIESL + b₅ON + b₆QC + b₇BC + b₈AB + b₇INC2 + b₈INC3

  where
  ON = 1 if the district is in Ontario and 0 otherwise
  QC = 1 if the district is in Quebec and 0 otherwise
  BC = 1 if the district is in BC and 0 otherwise
  AB = 1 if the district is in Alberta and 0 otherwise
  INC2 = 1 if the district is the middle income range and 0 otherwise
  INC3 = 1 if the district is the high income range and 0 otherwise

describe the difference between the desire for a good and the demand for a good as they are understood by economic analysis

Draw a supply and demand graph of the following scenarios. Use these graphs to answer what

happens to price and quantity? (Does is increase or decrease?) Must show graphs and answer

what happens to price and quantity.

a. (5 points) Cheese Market: Suppose that a technological advancement substantially

reduces the cost of producing cheese, while a new study suggests that excessive use of

cheese is harmful to a person’s health.

b. (5 points) Cream Market: Peaches and cream are complements. When the price of

peaches falls, and the price of raw milk (used to make cream) rises, what happens in the

market for cream?

Discuss in detail how perfectly competitive prices bring about allocative efficiency

(Answer this question for 10 marks)

Monetary Policy in Keynesian Models of the Macroeconomy

(c) Part of the challenge of monetary policy is that the level of potential output is not observed. Assume that the economy is in an equilibrium with output equal to potential output. Suppose the latest economic news leads the central bank to incorrectly raise their estimate of potential output. Use the AD-AS model to describe what will happen to output and inflation in both the short run and long run as a result of this mistake. Explain your reasoning in full.

Lee saves most of his money from his paycheck; he forgoes restaurant meals, new clothes, and a new car, and he lives in a small one-bedroom apartment. He understands that his utility is low now. However, his ______________ will give him _____ utility in the future.

A. planning; lower time-preference

B. decision making; higher intertemporal

C. decision making; lower intertemporal

D. decision making; higher

1. American manufacturing production fell in December more than it had in a decade largely due to the trade war with China. sign an initial trade deal. Our trade deficit -- the gap between what America sells and what it buys abroad -- was minus $43.1 billion at the end of 2019. Are you worried about country's weak global trade position and, briefly, why or why not?

2. U.S. law currently bans American companies from paying bribes in other countries in which bribes are culturally accepted or legal. Would you be in favor of allowing U.S. companies to participate in bribery overseas and, briefly, why or why not.

Determine the price elasticity of demand for commodity X, if a 15% increase in its price:
a) has no impact on its total expenditure.
b) reduces total expenditure.
c) increases total expenditure.

Explain in detail.

For each question be able to explain the significance of what is being asked. In other words, what are the consequences/legacy of the topic/event?

1. What was the reason(s) for United States imperialism (why did the United States hold imperial ambitions)? Explain United States imperial intervention in two regions in order to justify your argument. How do these examples relate back to your proposed reason for empire?

All questions below rely on the following assumptions:

p=20-0.25Q

MC=8= Average Cost

1. (5 pts) If there is a monopoly firm in this industry, what is the profit-maximizing P and Q?

And what is the total profit?

2. (5 pts) What is the profit maximizing P and Q for the two-firm Cournot oligopoly?

And what is the total profit?

3. (5 pts) Assume that are three firms with equal Qs in this Cournot oligopoly.  What is the industry P and Q at the profit maximizing equilibrium?

And what is the total profit?

Question 1

(a) Use the IS-LM model to illustrate and explain the effects of a decrease in consumer spending on equilibrium GDP and interest rates.

(b) Use the IS-LM model to illustrate and explain how a government could use fiscal policy to offset the effects of the decrease in consumer spending from question 1) above.

(c) Use the IS-LM model to illustrate and explain the change of equilibrium GDP and interest rates resulting from a decrease in the money supply. ALSO, under the standard assumptions, explain the dynamic responses of GDP and interest rates as they move from the original equilibrium to their new equilibrium values.

Total has discovered a potential 1 billion barrels of “wet” gas off the coast of South Africa. The gas could be used as petrol or perhaps even converted into electricity, according to one expert. The Brulpadda gas find should mean more tax revenue and a stronger rand. How Will It Affect South Africans Firstly, government will earn more tax. Total and its partners will pay the regular 28% corporate tax on all taxable income from Brulpadda. According to the most optimistic estimates, the Brulpadda find could yield $1 trillion (R14.4 trillion) for Total and its partners, which would mean a massive tax windfall for South Africa. Certain Businesses and Skills Will Be in Demand The Brulpadda find could have a massive boost to all kinds of businesses in South Africa. Companies providing helicopters, marine services, catering supplies and transport to get supplies to the site would be required. Adapted from “Everything You Need to Know about South Africa’s Massive Gas Find” by Helena Wasserman, Business Insider SA

4.1 Assuming that government budget is at zero balance discuss the implication of the gas find in terms of government’s fiscal policy for the following economic factors:

4.1.1 Collection of revenue through taxation on personal income

4.1.2 Government spending on the provision of goods and services

4.2 Explain, with the aid of a diagram, the economic impact on cost-push inflation and aggregate output.

4.3 Discuss the main type of unemployment that would be reduced.

Goods differ on the basis of whether their consumption is rival and excludable.

Explain the terms "rivalry" and "excludability" as they are used to define goods.

List the four categories of goods, and define these categories in terms of rivalry and excludability.