The Glorious Republic of Gisslovia assesses a 10% Social tax on the first $144,000 earned. The income tax is a flat 25% on all income in excess of $48,000. For each of the following incomes, determine the total amount of social tax, income tax , total tax (social tax + income tax) and the average tax rate (total tax/income):

a) $48,000

b) $96,000

c) $144,00

d) $192,000

e) $240,000

1. A researcher wishes to examine the relationship between wage earned and educational level of workers. For a sample of 4000 workers she has data on hourly earnings (measured in SAR), age of the worker (in years), worker’s gender, years of experience, number of years with the present employer, size of the firm in which the worker is employed, and highest educational qualification (with 4 classifications: no qualification, secondary school certificate, bachelor degree or PhD)

1. Explain how you would set up a model to address the researcher’s key interest.
2. Based on your model, how would you estimate the predicted impact on wages of holding a PhD compared to having a bachelor’s degree.
3. If the researcher uses ln(wage) as the dependent variable, how would the estimated coefficients be interpreted?
4. What general advice would you give the researcher in relation to her work – eg. what econometric issues should she be aware of in conducting this research and interpreting the results?

At the end of the second semester, Rita earned an B in the four-credit Algebra course, an A in the three-credit English course, an A in the 2-credit Language/Arts course, and a C in the three-credit Physics course.

Using a four-point grade system, A is equivalent to four points, B is equivalent to three points, C is equivalent to two points, D is equivalent to one point, and F has no point.

Calculate Rita's grade point average (GPA) for the second semester.

Phil Phoenix is paid monthly. For the month of January of the current year, he earned a total of $8,000. The FICA tax rate for social security is 6.2%, and the FICA tax rate for Medicare is 1.45%. The FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $8,000 of an employee's pay. The amount of federal income tax withheld from his earnings was $1,000. His net pay for the month is ________.

An employee earned $4,600 in February working for an employer. Cumulative earnings of the previous pay periods are $4,800. The FICA tax rate for Social Security is 6.2% of the first $127,200 of earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. What is the amount the employer should record as payroll taxes expense for the month of February?

$581.90

$110.00

$351.90

$483.90

$230.00

A researcher wishes to examine the relationship between wage earned and educational level of workers. For a sample of 4000 workers she has data on hourly earnings (measured in SAR), age of the worker (in years), worker’s gender, years of experience, number of years with the present employer, size of the firm in which the worker is employed, and highest educational qualification (with 4 classifications: no qualification, secondary school certificate, bachelor degree or PhD)

1. Explain how you would set up a model to address the researcher’s key interest.
2. Based on your model, how would you estimate the predicted impact on wages of holding a PhD compared to having a bachelor’s degree.
3. If the researcher uses ln(wage) as the dependent variable, how would the estimated coefficients be interpreted?
4. What general advice would you give the researcher in relation to her work – eg. what econometric issues should she be aware of in conducting this research and interpreting the results?

Ganymedes earned on his bond investments a real rate of return of 5.75 percent for a time period when the inflation rate was 12.79 percent. What was the actual nominal rate of return?

Hector just bought a 5.4 percent $1,000 bond that matures in 15 years, pays interest semiannually, and has a yield to maturity of 6.49 percent. How much dis Hector pay for this bond?

A researcher wishes to examine the relationship between wage earned and educational level of workers. For a sample of 4000 workers she has data on hourly earnings (measured in SAR), age of the worker (in years), worker’s gender, years of experience, number of years with the present employer, size of the firm in which the worker is employed, and highest educational qualification (with 4 classifications: no qualification, secondary school certificate, bachelor degree or PhD)

1. Explain how you would set up a model to address the researcher’s key interest.
2. Based on your model, how would you estimate the predicted impact on wages of holding a PhD compared to having a bachelor’s degree.
3. If the researcher uses ln(wage) as the dependent variable, how would the estimated coefficients be interpreted?
4. What general advice would you give the researcher in relation to her work – eg. what econometric issues should she be aware of in conducting this research and interpreting the results?

The SAT scores earned on the math portion are approximately normally distributed with mean 516 and standard deviation 116. Answer the following questions based on this information. Make sure you show your work.

1. Using a printout of the graph above or making your own copy, mark the mean SAT score on the math proportion at the appropriate place. Then mark values of score that are 1, 2, and 3 standard deviations away from the mean value. Labeling your marks with the corresponding scores.

2. Using the curve from question 1, shade the area under the curve that corresponds to P(X<500).

3. Find P(X<500). State in a sentence what this value represents in context of the data.

4. Using another version of the curve above, shade the area under the curve where X>600.

5. Find P(X>600). State in a sentence what this value represents in context of the data.

6. Find the probability that a test taker scores between 500 and 600.

7. If a test taker is at the 80th percentile, what is the score?