In the Absence of Government Interference, There Is a Constant

question 28

Multiple Choice

in the absence of government interference, there is a constant marginal cost of $5 per ounce for growing marijuana and delivering it to buyers.If the probability that any shipment of marijuana seized is .30 and the fine if a shipper caught is $50 per ounce, then the equilibrium price of marijuana per ounce is

• A)$28.57.
• B)$20.
• C)$55.
• D)$3.50.
• E)$6.50.

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Definitions:

First-Order Autocorrelation

First-order autocorrelation is a statistical measure indicating the correlation between values in a time series and their immediate predecessors.

Durbin-Watson D Statistic

A statistical tool designed to determine the existence of first-lag autocorrelation in the residuals of a regression analysis.

Regression Analysis

A statistical method for investigating the relationship between a dependent variable and one or more independent variables.

Durbin-Watson Statistic

A measure used in statistics to find out whether autocorrelation at lag one occurs in the residuals after performing a regression analysis.