Concept explainers
(a)
Identify the selection bias in the study of heart disease and fast food.
(a)
Explanation of Solution
In the study of 5,000 office workers in Chicago, they considered only two variables such as heart diseases and fast food. But, in reality there were many reasons behind the heart diseases of a person. For example, lack of exercise, or a poor healthy life style and so on. With these reasons, there is also a possibility of regularly dine on fast food. Therefore, eating fast food thrice or many times per week is not only the reason for heart disease. Therefore, selection bias occurs in this study.
Selection bias: A selection bias occurs in a study, if the sample used in that study is not random.
(b)
Identify the selection bias in the study of senior assisted living facilities.
(b)
Explanation of Solution
A survey of senior-assisted living facilities states that majority of residents are females. Because, on an average, female tend to outlive men. But, this is not in the case of old men citizens. They do not need much assistance as older women. But, the notable fact that there are several older women in the population than older men. Therefore, selection bias occurs in this study.
Selection bias: A selection bias occurs in a study, if the sample used in that study is not random.
(c)
Identify the selection bias in the study of graduation from private and public universities.
(c)
Explanation of Solution
This study of college students' graduation from private and public universities states that an education from private university will enhance students' earnings. Those who have selected private university have more earning potential than those who have selected public universities. Therefore, private university is more selective. In other words, those students who have greater earning potential would likely select private universities.
Selection bias: A selection bias occurs in a study, if the sample used in that study is not random.
Want to see more full solutions like this?
Chapter 22 Solutions
Principles of Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (12th Edition)
- Suppose that Boris is a price taker and the price for each concert is $35. For Boris to maximise his total net benefit (total benefit – total cost), how many concerts will he attend? Draw Boris' individual demand curve to help you find the answer. Note: if Boris is indifferent between attending and not attending a concert, please assume that he attends it to break the tie. The optimal number of concerts that Boris will attend is:arrow_forwardWhat is ability bias, example?arrow_forwardIs Pareto Efficiency enough to explain Welfare economics?arrow_forward
- eCONOMIC Which of the following scenarios best illustrates the endowment effect? Question 14 options: Sam buys a piece of art for $1,000 but refuses to sell it for anything less than $2,000. John buys a new bicycle for $500 but is willing to sell it for $300 if he needs to. Rachel gets a free concert ticket but is willing to sell it for $40 if she can't go. Susan receives a gift card for $50 but is willing to trade it for two gift cards worth $25 each.arrow_forwardExplain why the Second Fundamental Theorem of Welfare Economics implies that there is no intrinsic trade-off between efficiency and interpersonal equity.arrow_forwardSuppose X = R k + for some k ≥ 2, and we define x = (x1 , …, xk ) ≥ = (y1 , …, yk ) if x ≥ y; that is, if for each i = 1, …, k, xi ≥ yi . (This is known as the Pareto ordering on R k + ; it plays an important role in the context of social choice theory in Chapter 8.) (a) Show that ≥ is transitive but not complete. (b) Characterize ≥ Is asymmetric? Is≥ Negatively transitive? Prove your assertions. (c) Characterize ~ defined from ≥ in the usual fashion; that is, x ~ y if x ≥ y and y x. Is ~ reflexive? Symmetric? Transitive? Prove your assertions.arrow_forward
- Economics A researcher is able to observe selection bias. True or Falsearrow_forward. Show that Cobb-Douglas preferences are homothetic preferencesarrow_forwardQuestion 3 In the Walrasian world, Pareto optimal allocations are crucial in establishing an equilibrium outcome with respect to welfare. Give an exposition of the two Welfare Theorems, demonstrating also that they are Pareto efficient.arrow_forward
- Heterogeneity in an endowment economy Suppose we have two typesof households: A and B. The utility maximization problem for a consumerof type i is        max   InCi,t+β ln Ci,t+1       Ct,Ct+1subject to       Ci,t +Ci,t+1/ 1 + rt = Yi,t + Yi,t+1 / 1 + rt Note that the A and B households have the same discount rate and the same utility function. The only thing that is possibly different is their endowments.  1, Write down the Euler equation for households A and B.arrow_forwardShow that perfect substitutes are an example of homothetic preferencesarrow_forwardSuppose that Brooks, Inc. and Spring, Inc. form a joint venture, River Company, whose utility pumps replace the output sold by the parent companies in the domestic market. Assuming that River Company operates as a monopolist and that its costs equal MC0 = AC0, what is:  (f) Assume River Company’s formation leads to technological advances that yield cost reductions, such that MC1 = AC1. Compared to the original equilibrium (in (a)), what is the net effect of River Company’s formation on welfare? (Calculate the new total surplus (consumer surplus + producer surplus), and take the difference from your answer to (a).) (g) Assume River Company’s formation leads to wage concessions from River Company employees, such that MC1 = AC1. Compared to the original equilibrium, what is the net effect of River Company’s formation on welfare? (h) Assume River Company’s formation leads to changes in work rules that lead to higher worker productivity, such that MC1 = AC1. Compared to the original…arrow_forward
- Principles of Economics, 7th Edition (MindTap Cou...EconomicsISBN:9781285165875Author:N. Gregory MankiwPublisher:Cengage Learning
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning