In Explaining the Income Earned by University Graduates, Which of the Following

question 91

Multiple Choice

In explaining the income earned by university graduates, which of the following independent variables is best represented by an indicator variable in a regression model?

• A) Grade point average.
• B) Gender
• C) Number of years since graduating from high school.
• D) Age

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Definitions:

External Costs

Costs that are not borne by the parties involved in economic transactions but are imposed on others, such as environmental pollution.

External Benefits

Advantages that accrue to individuals or society indirectly participating in an economic transaction or activity.

Market Outcome

The result of all buyers' and sellers' interactions in a market, determined by factors like price, quantity, and quality of goods and services.

External Costs

External costs, also known as negative externalities, are the costs experienced by third parties who are not involved in an economic transaction, often not reflected in market transactions.