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Midterm

ECO 311 Miami U eco311mt2Fall 1sp18Exam


Department
Economics
Course Code
ECO 311
Professor
All
Study Guide
Midterm

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Eco311, Second Midterm Exam, Spring 2018.
Prof. Bill Even
-1-
Your Name (Please print) ________________________________________
Your section (Please circle) 8:30 10:05
Your row (Please circle) 1 2 3 4 5
Directions
Place your answers to all questions in the space provided. Clearly circle your answer to each question
so that it can easily be distinguished from your work. Round all numerical answers to the nearest 100th
(e.g. 1.23) unless specifically told otherwise. Each question is worth 4 points unless otherwise
indicated.
The formula sheet and tables with the standard normal CDF and F-distribution are attached to the end
of the exam.

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Eco311, Second Midterm Exam, Spring 2018.
Prof. Bill Even
-2-
Table 1 (provided in the attachment) provides the results of a regression of student grades in courses at
Miami University between 2008 and 2017. In addition to coefficients and standard errors, the model’s
total and residual sum of squares are provided along with the number of observations. The grade variable
is the standard numeric value assigned to letter grades and ranges from 0 (F) to 4 (A or A+) The control
variables used in table 1 include:
Female: dummy variable that equals one if the student is female; 0 otherwise.
Resident: dummy variable that equals one if the student is a resident of Ohio; 0 otherwise
High School GPA: The student’s grade point average in high school.
ACT Score: The student’s composite ACT score.
Use specification (1) to answer the questions below.
1) Construct a 95% confidence interval for the coefficient on the Ohio resident dummy variable.
2) What is R2 in specification (1)?
3) (6 points) If another control variable is added to the regression, indicate whether each of the following
statements is true (T) or false (F).
a) R2 cannot decrease.
b) Adjusted R2 will decrease unless the new variable has a t-statistic with an absolute value greater
than one.
c) Adjusted R2 will be less than R2
4) If the t-statistic for a coefficient is 1.50, what is the associated p-value for the null hypothesis that the
coefficient is zero? Give answer to nearest .01. (Note: the table for the standard normal distribution
is included attachments.)
5) Based on specification 1 in table 1, construct a t-statistic for the null hypothesis that Ohio residents
and non-residents earn the same grades.
a) What is the value of the t-statistic?
b) Can you reject the null hypothesis at the
i) .10 level of significance?
ii) .01 level of significance?
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