In Econometrics, We Typically Do Not Rely on Exact or Finite

question 60

Short Answer

In econometrics, we typically do not rely on exact or finite sample distributions because a. we have approximately an infinite number of observations (think of re-sampling).
b. variables typically are normally distributed.
c. the covariances of $Y _ { i } , Y _ { j }$ are typically not zero.
d. asymptotic distributions can be counted on to provide good approximations to the exact sampling distribution (given the number of observations available in most cases).

Understand the concept of the optimal solution, including its determination and its location within the feasible region.

Grasp the application of linear programming in practical scenarios such as product mix, resource allocation, and minimization or maximization problems.

Familiarize with the iso-profit line solution method and its application to maximize the objective function in linear programming.

Recognize the infeasibility of solutions and understand unbounded problems in the context of linear programming.

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