ECON 710 Final: ECON 710 UW Madison Final Exam 2014a

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31 Jan 2019
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2i(cid:1) =b(cid:27)2 i=1(cid:0)e2 npn npn (a) b(cid:18) = 1. 2i(cid:1) (cid:0) (cid:18) =(cid:0)e2 (b) let ui =(cid:0)e2. 2 = 1 npn i = 0 and i=1 e2. 1 (cid:0) (cid:27)2 ui !d n (0; (cid:27)2 v) 2i(cid:1)2(cid:17) (cid:0)(cid:0)(cid:27)2 var (ui) = e(cid:16)(cid:0)e2 pn(cid:16)b(cid:18) (cid:0) (cid:18)(cid:17) = nxi=1. Equivalently, i wherebui = ui =(cid:0)e2 npn i=1bu2 nxi=1 nxi=1 nxi=1. 1 n e4 e4 v = 1 (c) b(cid:27)2 or e2. 2. (a) in matrix notation, y = x1(cid:12) 1 + x2(cid:12) 2 + e and b(cid:12) 1 =(cid:16)(cid:0)x 0. The estimate is overidenti(cid:133)ed since > k1 . Substituting y = x1(cid:12) 1 + x2(cid:12) 2 + e for y; b(cid:12) 1 = (cid:12) 1 +(cid:16)(cid:0)x 0. 1z(cid:1)(cid:0)z 0z(cid:1)(cid:0)1(cid:0)z 0e(cid:1) where (b) since 1 n z 0e b1n = (cid:16)(cid:0)x 0 r1n = (cid:16)(cid:0)x 0 p (cid:0)! X 0 r1n = (cid:18) 1 (cid:0)! (cid:0)q0.

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