Suppose that, prior to the passage of the Truth in Lending Simplification Act and Regulation Z, the demand for consumer loans was given by Q^d_pre-TILSA = 12 -100P (in billions of dollars) and the supply of consumer loans by credit unions and other lending institutions was Q^S_pre-TILSA = 5 + 150P (in billions of dollars). The TILSA now requires lenders to provide consumers with complete information about the rights and responsibilities of entering into a lending relationship with the institution, and as a result, the demand for loans increased to Q^d_post-TILSA = 18 -100P (in billions of dollars). However, the TILSA also imposed “compliance costs” on lending institutions, and this reduced the supply of consumer loans to Q^S_post-TILSA = 3 + 150P (in billions of dollars).

Based on this information, compare the equilibrium price and quantity of consumer loans before and after the Truth in Lending Simplification Act.(Note: Q is measured in billions of dollars and P is the interest rate).

Instruction: Enter your responses for the equilibrium price in percentage terms, and round all responses to one decimal place.

Equilibrium price (interest rate) before TILSA: ____ percent

Equilibrium quantity (in billions of dollars) before TILSA: $ ___ billion

Equilibrium price (interest rate) after TILSA: _____percent

Equilibrium quantity (in billions of dollars) after TILSA: $ _____billion

Do students reduce study time in classes where they achieve a higher midterm score? In a Journal of Economic Education article (Winter 2005), Gregory Krohn and Catherine O’Connor studied student effort and performance in a class over a semester. In an intermediate macroeconomics course, they found that “students respond to higher midterm scores by reducing the number of hours they subsequently allocate to studying for the course.” Suppose that a random sample of n = 8 students who performed well on the midterm exam was taken and weekly study times before and after the exam were compared. The resulting data are given in Table 10.6. Assume that the population of all possible paired differences is normally distributed.

Table 10.6

Paired T-Test and CI: Study Before, Study After

95% CI for mean difference: (5.20929, 10.79071)

T-Test of mean difference = 0 (vs not = 0): T-Value = 6.78, P-Value = .0003

(a) Set up the null and alternative hypotheses to test whether there is a difference in the true mean study time before and after the midterm exam.

H₀: µ_d =  versus H_a: µ_d ≠

(b) Above we present the MINITAB output for the paired differences test. Use the output and critical values to test the hypotheses at the .10, .05, and .01 level of significance. Has the true mean study time changed? (Round your answer to 2 decimal places.)

t =   We have (Click to select)strongvery strongextremely strongno evidence.

(c) Use the p-value to test the hypotheses at the .10, .05, and .01 level of significance. How much evidence is there against the null hypothesis?

There is (Click to select)extermly strong evidenceno evidencestrong evidencevery strong evidence against the null hypothesis.

1-Look up the requested values using book tables. You may check with a calculator, but enter the table value.

   Let T denote a t-distribution variable with 14 degrees of freedom. Find:

P(T>1.761)=?

Note: Enter X.XX AT LEAST ONE DIGIT BEFORE THE DECIMAL, TWO AFTER and round up. Thus, 27 is entered as 27.00, 3.5 is entered as 3.50, 0.3750 is entered as 0.38

2-Look up the requested values using book tables. You may check with a calculator, but enter the table value.

     Find the normal distribution P VALUE used for a Greater Than one-sided alternative hypothesis test with a test statistic z=2.32.

Note: Enter X.XX AT LEAST ONE DIGIT BEFORE THE DECIMAL, TWO AFTER and round up. Thus, 27 is entered as 27.00, 3.5 is entered as 3.50, 0.3750 is entered as 0.3

3-Look up the requested values using book tables. You may check with a calculator, but enter the table value.

     Find the standard normal distribution Critical VALUE used for a Less Than one-sided alternative hypothesis test with a 1% significance level.

Note: Enter X.XX AT LEAST ONE DIGIT BEFORE THE DECIMAL, TWO AFTER and round up. Thus, 27 is entered as 27.00, 3.5 is entered as 3.50, 0.3750 is entered as 0.3

4-Look up the requested values using book tables. You may check with a calculator, but enter the table value.

   Let T denote a t-distribution variable with 25 degrees of freedom. Find:

P(T<-0.684)=?

Note: Enter X.XX AT LEAST ONE DIGIT BEFORE THE DECIMAL, TWO AFTER and round up. Thus, 27 is entered as 27.00, 3.5 is entered as 3.50, 0.3750 is entered as 0.38

5-Use a CALCULATOR to compute the below probability.

     Suppose a basketball player hits and average of 60% of his free throws. In a game with 15 independent free throws, what is the probability he makes exactly 12 baskets?

Note: Enter X.XX AT LEAST ONE DIGIT BEFORE THE DECIMAL, TWO AFTER and round up. Thus, 27 is entered as 27.00, 3.5 is entered as 3.50, 0.3750 is entered as 0.3

Do students reduce study time in classes where they achieve a higher midterm score? In a Journal of Economic Education article (Winter 2005), Gregory Krohn and Catherine O’Connor studied student effort and performance in a class over a semester. In an intermediate macroeconomics course, they found that “students respond to higher midterm scores by reducing the number of hours they subsequently allocate to studying for the course.” Suppose that a random sample of n = 8 students who performed well on the midterm exam was taken and weekly study times before and after the exam were compared. The resulting data are given in Table 10.6. Assume that the population of all possible paired differences is normally distributed.

Table 10.6

Paired T-Test and CI: Study Before, Study After

95% CI for mean difference: (3.65391, 8.84609)

T-Test of mean difference = 0 (vs not = 0): T-Value = 5.69, P-Value = .0007

(a) Set up the null and alternative hypotheses to test whether there is a difference in the true mean study time before and after the midterm exam.

H₀: µ_d =  versus H_a: µ_d ≠

(b) Above we present the MINITAB output for the paired differences test. Use the output and critical values to test the hypotheses at the .10, .05, and .01 level of significance. Has the true mean study time changed? (Round your answer to 2 decimal places.)

t =   We have (Click to select)noextremely strongvery strongstrong evidence.

(c) Use the p-value to test the hypotheses at the .10, .05, and .01 level of significance. How much evidence is there against the null hypothesis?

There is (Click to select)no evidencevery strong evidenceextermly strong evidencestrong evidence against the null hypothesis.

Do students reduce study time in classes where they achieve a higher midterm score? In a Journal of Economic Education article (Winter 2005), Gregory Krohn and Catherine O’Connor studied student effort and performance in a class over a semester. In an intermediate macroeconomics course, they found that “students respond to higher midterm scores by reducing the number of hours they subsequently allocate to studying for the course.” Suppose that a random sample of n = 8 students who performed well on the midterm exam was taken and weekly study times before and after the exam were compared. The resulting data are given in Table 10.6. Assume that the population of all possible paired differences is normally distributed.

Table 10.6

Paired T-Test and CI: Study Before, Study After

95% CI for mean difference: (1.97112, 6.77888)

T-Test of mean difference = 0 (vs not = 0): T-Value = 4.30, P-Value = .0036

(a) Set up the null and alternative hypotheses to test whether there is a difference in the true mean study time before and after the midterm exam.

H₀: µ_d =  versus H_a: µ_d ?

(b) Above we present the MINITAB output for the paired differences test. Use the output and critical values to test the hypotheses at the .10, .05, and .01 level of significance. Has the true mean study time changed? (Round your answer to 2 decimal places.)

t =   We have (Click to select)novery strongextremely strongstrong evidence.

(c) Use the p-value to test the hypotheses at the .10, .05, and .01 level of significance. How much evidence is there against the null hypothesis?

There is (Click to select)very strong evidenceextermly strong evidencestrong evidenceno evidence against the null hypothesis.

Do students reduce study time in classes where they achieve a higher midterm score? In a Journal of Economic Education article (Winter 2005), Gregory Krohn and Catherine O’Connor studied student effort and performance in a class over a semester. In an intermediate macroeconomics course, they found that “students respond to higher midterm scores by reducing the number of hours they subsequently allocate to studying for the course.” Suppose that a random sample of n = 8 students who performed well on the midterm exam was taken and weekly study times before and after the exam were compared. The resulting data are given in Table 10.6. Assume that the population of all possible paired differences is normally distributed.

Table 10.6

Paired T-Test and CI: Study Before, Study After

95% CI for mean difference: (3.73660, 12.51340)

T-Test of mean difference = 0 (vs not = 0): T-Value = 4.38, P-Value = .0032

(a) Set up the null and alternative hypotheses to test whether there is a difference in the true mean study time before and after the midterm exam.

H₀: µ_d =  versus H_a: µ_d ?

(b) Above we present the MINITAB output for the paired differences test. Use the output and critical values to test the hypotheses at the .10, .05, and .01 level of significance. Has the true mean study time changed?(Round your answer to 2 decimal places.)

t =   We have (Click to select)strongvery strongextremely strongno evidence.

(c) Use the p-value to test the hypotheses at the .10, .05, and .01 level of significance. How much evidence is there against the null hypothesis?

There is (Click to select)no evidencevery strong evidencestrong evidenceextermly strong evidence against the null hypothesis.

In 2010, the United Nations claimed that there was a higher rate of college graduates in men than in women from the country of A. A fact finding organization went to country A to conduct a random sample from a population of 10 million people The results revealed that 60 percent of 2500 men and 54 percent of 2510 women had college degrees. Do these results indicate that the United Nations findings were correct? (Assume significance level α=0.01) Be sure to verify the conditions.  

Test an appropriate hypothesis and state your conclusion.

At the height of the housing crisis in the US, in 2009-2010 the Government decided for a temporary extension of unemployment benefits to 99 weeks, from the standard six months.    (In parallel way, during this Corona time, millions of unemployed seek the same kind of benefits. )

a) What do you think of this decision? What are the positive and negative impacts of this decision to the society and the overall economy?

b) How would J.M. Keynes react to this extension?

c) How would a Classical Economist say about it?

d) Along with the Unemployment Benefits, during the Corona time, as well as previous recessions, the Government poured in billions dollars to stimulate the economy through various programs (to individual taxpayers as well as small, medium, and large businesses). Some worry about the future consequence, such as Inflation. According to you, how does the increase in government spending on those programs might or might not have effect on Inflation?

At the height of the housing crisis in the US, in 2009-2010 the Government decided for a temporary extension of unemployment benefits to 99 weeks, from the standard six months.    (In parallel way, during this Corona time, millions of unemployed seek the same kind of benefits. )

What do you think of this decision? What are the positive and negative impacts of this decision to the society and the overall economy? How would J.M. Keynes react to this extension? How would a Classical Economist say about it? Along with the Unemployment Benefits, during the Corona time, as well as previous recessions, the Government poured in billions dollars to stimulate the economy through various programs (to individual taxpayers as well as small, medium, and large businesses). Some worry about the future consequence, such as Inflation. According to you, how does the increase in government spending on those programs might or might not have effect on Inflation?

In 2010, the United Nations claimed that there was a higher rate of illiteracy in men than in women from the country of Qatar. A humanitarian organization went to Qatar to conduct a random sample. The results revealed that 45 out of 234 men and 42 out of 251 women were classified as illiterate on the same measurement test. Do these results indicate that the United Nations' findings were correct?

1. Test an appropriate hypothesis and state your conclusion.

2. Find a 95% confidence interval for the difference in the proportions of illiteracy in men and women from Qatar. Interpret your interval.