If the Variance of the Error Term Is Not the Same

question 102

Multiple Choice

If the variance of the error term is not the same for all observations,we

• A)Get estimators that are biased.
• B)Can perform tests of significance.
• C)Cannot conduct tests of significance.
• D)A and C

Analyze changes in total surplus resulting from price changes.

Determine the equilibrium quantity and price in a market.

Understand the concept of producer surplus and how it is affected by market changes.

Calculate changes in consumer surplus due to shifts in price.

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Definitions:

Net Investment

The aggregate investment in new capital assets less the depreciation charges on the current capital assets.

Gross Investment

The total amount spent on purchases of new capital and on replacing depreciated capital within an economy during a specific period.

Depreciation

The process by which the value of an asset decreases over time, often due to wear and tear or obsolescence.

Disposable Income

Income available to an individual or household after accounting for taxes and other mandatory charges, available to spend or save.