DU BA ECONOMICS HONS. Introductory Econometrics,7033 SEM3 2013 PAPER - B Com PDF Download

 Page 1


This question paper contains 24 printed pages +7 pages table attached] 
Roll No. I I I I I I I I I . I I I· 
.S. No. of Question Paper 7033 
Unique Paper Code 227304 D 
Name of the Paper Introductory Econometrics 
Name of the Course B.A. (Hons.) Economics 
Semester Ill 
Du1~ation : 3 Hours Maximum Marks : 75 
(Write your Roll No. on the top immediately on receipt of this question paper.) 
Note Answers may be written either in English or in Hindi; but the same medium should be 
used throughout the paper. 
R:tlfon : ~ >rF£--q;;r CfiT ~ ~ c:rr ~ f4im ~ 'iWilT -q ~; ~ -~~ ~ 
CfiT liT'Ufli ~ -m ~ ~ 1 • 
The question paper consists of seven questions. Answer any five questions. 
Marks allotted to each question are indicated in parentheses. 
Use of simple non-programmable calculator is allowed. 
Statisti'Cal tables are attached for your reference. 
·~ >I"Ff--q?f -q wo >rFf % , ~ -qfq m ~-~ ~ 
~ >rFf ~ ~ ~ Cf>liSdcf}'i it ~ ~ % 
m~ 3"f!>ll!114rfl?.T ~<19182:< CfiT >P-lm ~ ~ ~ % 
~ ~'l.f ~ Bi~Cfil~ fll\ful~i ~ % I 
P.T.O. 
Page 2


This question paper contains 24 printed pages +7 pages table attached] 
Roll No. I I I I I I I I I . I I I· 
.S. No. of Question Paper 7033 
Unique Paper Code 227304 D 
Name of the Paper Introductory Econometrics 
Name of the Course B.A. (Hons.) Economics 
Semester Ill 
Du1~ation : 3 Hours Maximum Marks : 75 
(Write your Roll No. on the top immediately on receipt of this question paper.) 
Note Answers may be written either in English or in Hindi; but the same medium should be 
used throughout the paper. 
R:tlfon : ~ >rF£--q;;r CfiT ~ ~ c:rr ~ f4im ~ 'iWilT -q ~; ~ -~~ ~ 
CfiT liT'Ufli ~ -m ~ ~ 1 • 
The question paper consists of seven questions. Answer any five questions. 
Marks allotted to each question are indicated in parentheses. 
Use of simple non-programmable calculator is allowed. 
Statisti'Cal tables are attached for your reference. 
·~ >I"Ff--q?f -q wo >rFf % , ~ -qfq m ~-~ ~ 
~ >rFf ~ ~ ~ Cf>liSdcf}'i it ~ ~ % 
m~ 3"f!>ll!114rfl?.T ~<19182:< CfiT >P-lm ~ ~ ~ % 
~ ~'l.f ~ Bi~Cfil~ fll\ful~i ~ % I 
P.T.O. 
r 
( 2 ) 7033 
1. State whether the following statements are true or false. Give reasons for your answer : 
(a) ln the regression model Yi = B
1 
+ B
2
Xi + ui, suppose we o~tain a 95% confidence 
interval for B
2 
as· (0.1934, 1.8499). We can say that the probability is 95% that this 
interval includes the true B
2
. 
necessarily pass through the origin. 
In the regression model Y i = B 
1 
+ B
2
X
2
i + B
3
X
3 
i + ui, if all vaJues of X
3 
are identical, . 
I 
then the variance of the ordinary least squares estimators of the slope coefficients is not 
defined. 
(d) In log-linear regression models, the magnitude of the eStimated slope coefficients is 
invariant to the units in which the explanatory variables are measured, unlike linear 
models. 
(e) If a qualitative variable has three categories and we introduce three dummies in the regression 
model. the unknown parameters can still be estimated. [5x3=15] 
Page 3


This question paper contains 24 printed pages +7 pages table attached] 
Roll No. I I I I I I I I I . I I I· 
.S. No. of Question Paper 7033 
Unique Paper Code 227304 D 
Name of the Paper Introductory Econometrics 
Name of the Course B.A. (Hons.) Economics 
Semester Ill 
Du1~ation : 3 Hours Maximum Marks : 75 
(Write your Roll No. on the top immediately on receipt of this question paper.) 
Note Answers may be written either in English or in Hindi; but the same medium should be 
used throughout the paper. 
R:tlfon : ~ >rF£--q;;r CfiT ~ ~ c:rr ~ f4im ~ 'iWilT -q ~; ~ -~~ ~ 
CfiT liT'Ufli ~ -m ~ ~ 1 • 
The question paper consists of seven questions. Answer any five questions. 
Marks allotted to each question are indicated in parentheses. 
Use of simple non-programmable calculator is allowed. 
Statisti'Cal tables are attached for your reference. 
·~ >I"Ff--q?f -q wo >rFf % , ~ -qfq m ~-~ ~ 
~ >rFf ~ ~ ~ Cf>liSdcf}'i it ~ ~ % 
m~ 3"f!>ll!114rfl?.T ~<19182:< CfiT >P-lm ~ ~ ~ % 
~ ~'l.f ~ Bi~Cfil~ fll\ful~i ~ % I 
P.T.O. 
r 
( 2 ) 7033 
1. State whether the following statements are true or false. Give reasons for your answer : 
(a) ln the regression model Yi = B
1 
+ B
2
Xi + ui, suppose we o~tain a 95% confidence 
interval for B
2 
as· (0.1934, 1.8499). We can say that the probability is 95% that this 
interval includes the true B
2
. 
necessarily pass through the origin. 
In the regression model Y i = B 
1 
+ B
2
X
2
i + B
3
X
3 
i + ui, if all vaJues of X
3 
are identical, . 
I 
then the variance of the ordinary least squares estimators of the slope coefficients is not 
defined. 
(d) In log-linear regression models, the magnitude of the eStimated slope coefficients is 
invariant to the units in which the explanatory variables are measured, unlike linear 
models. 
(e) If a qualitative variable has three categories and we introduce three dummies in the regression 
model. the unknown parameters can still be estimated. [5x3=15] 
( 3 ) 7033 
(~) ~~ ~ Y· = Bl + B2X· + U· ~)
1
· = y.- y X·= x.- X- Rf.<"i:ld 
I l l ~l(!l I I ' I I ' 
% I 
P.T.O. 
Page 4


This question paper contains 24 printed pages +7 pages table attached] 
Roll No. I I I I I I I I I . I I I· 
.S. No. of Question Paper 7033 
Unique Paper Code 227304 D 
Name of the Paper Introductory Econometrics 
Name of the Course B.A. (Hons.) Economics 
Semester Ill 
Du1~ation : 3 Hours Maximum Marks : 75 
(Write your Roll No. on the top immediately on receipt of this question paper.) 
Note Answers may be written either in English or in Hindi; but the same medium should be 
used throughout the paper. 
R:tlfon : ~ >rF£--q;;r CfiT ~ ~ c:rr ~ f4im ~ 'iWilT -q ~; ~ -~~ ~ 
CfiT liT'Ufli ~ -m ~ ~ 1 • 
The question paper consists of seven questions. Answer any five questions. 
Marks allotted to each question are indicated in parentheses. 
Use of simple non-programmable calculator is allowed. 
Statisti'Cal tables are attached for your reference. 
·~ >I"Ff--q?f -q wo >rFf % , ~ -qfq m ~-~ ~ 
~ >rFf ~ ~ ~ Cf>liSdcf}'i it ~ ~ % 
m~ 3"f!>ll!114rfl?.T ~<19182:< CfiT >P-lm ~ ~ ~ % 
~ ~'l.f ~ Bi~Cfil~ fll\ful~i ~ % I 
P.T.O. 
r 
( 2 ) 7033 
1. State whether the following statements are true or false. Give reasons for your answer : 
(a) ln the regression model Yi = B
1 
+ B
2
Xi + ui, suppose we o~tain a 95% confidence 
interval for B
2 
as· (0.1934, 1.8499). We can say that the probability is 95% that this 
interval includes the true B
2
. 
necessarily pass through the origin. 
In the regression model Y i = B 
1 
+ B
2
X
2
i + B
3
X
3 
i + ui, if all vaJues of X
3 
are identical, . 
I 
then the variance of the ordinary least squares estimators of the slope coefficients is not 
defined. 
(d) In log-linear regression models, the magnitude of the eStimated slope coefficients is 
invariant to the units in which the explanatory variables are measured, unlike linear 
models. 
(e) If a qualitative variable has three categories and we introduce three dummies in the regression 
model. the unknown parameters can still be estimated. [5x3=15] 
( 3 ) 7033 
(~) ~~ ~ Y· = Bl + B2X· + U· ~)
1
· = y.- y X·= x.- X- Rf.<"i:ld 
I l l ~l(!l I I ' I I ' 
% I 
P.T.O. 
( 4 ) 7033 
2. (a) Suppose that you are considering opening a restaurant at a location where average traffi~ 
volume is 1000 cars per day. To help you decide whether to open the restaurant or 
not. you collect data on daily sales (in thousands of rupees) and average traffic volume 
(in hundreds. of cars per day) for a random sample of 22 restaurants. You set up your 
model as : 
You know that L xyi = 17170, 1: Xf = 13055, Y = 32, X = 22.5. 
(i) Obtain the ordinary least square estimator of the slope coefficient and interpret it. 
(ii) Estimate the average sales for your potential restaurant location. 
. . . 
(iii) Will the value of the coefficient of determination change if you want to change the 
unit of measurement of sales from thousands of rupees to rupees, leaving units of 
traffic _volume unchanged ? Explain your answer. [5] 
(h) The following demand equation was estimated using monthly data on mineral water 
consumption, numbers in parentheses are standard errors : 
-
In Q
1 
= 1.534 - 0.750 ln Pt + 0.251 In P
1
' 
se = (0.2011) (0.1012) (0.2001) 
Page 5


This question paper contains 24 printed pages +7 pages table attached] 
Roll No. I I I I I I I I I . I I I· 
.S. No. of Question Paper 7033 
Unique Paper Code 227304 D 
Name of the Paper Introductory Econometrics 
Name of the Course B.A. (Hons.) Economics 
Semester Ill 
Du1~ation : 3 Hours Maximum Marks : 75 
(Write your Roll No. on the top immediately on receipt of this question paper.) 
Note Answers may be written either in English or in Hindi; but the same medium should be 
used throughout the paper. 
R:tlfon : ~ >rF£--q;;r CfiT ~ ~ c:rr ~ f4im ~ 'iWilT -q ~; ~ -~~ ~ 
CfiT liT'Ufli ~ -m ~ ~ 1 • 
The question paper consists of seven questions. Answer any five questions. 
Marks allotted to each question are indicated in parentheses. 
Use of simple non-programmable calculator is allowed. 
Statisti'Cal tables are attached for your reference. 
·~ >I"Ff--q?f -q wo >rFf % , ~ -qfq m ~-~ ~ 
~ >rFf ~ ~ ~ Cf>liSdcf}'i it ~ ~ % 
m~ 3"f!>ll!114rfl?.T ~<19182:< CfiT >P-lm ~ ~ ~ % 
~ ~'l.f ~ Bi~Cfil~ fll\ful~i ~ % I 
P.T.O. 
r 
( 2 ) 7033 
1. State whether the following statements are true or false. Give reasons for your answer : 
(a) ln the regression model Yi = B
1 
+ B
2
Xi + ui, suppose we o~tain a 95% confidence 
interval for B
2 
as· (0.1934, 1.8499). We can say that the probability is 95% that this 
interval includes the true B
2
. 
necessarily pass through the origin. 
In the regression model Y i = B 
1 
+ B
2
X
2
i + B
3
X
3 
i + ui, if all vaJues of X
3 
are identical, . 
I 
then the variance of the ordinary least squares estimators of the slope coefficients is not 
defined. 
(d) In log-linear regression models, the magnitude of the eStimated slope coefficients is 
invariant to the units in which the explanatory variables are measured, unlike linear 
models. 
(e) If a qualitative variable has three categories and we introduce three dummies in the regression 
model. the unknown parameters can still be estimated. [5x3=15] 
( 3 ) 7033 
(~) ~~ ~ Y· = Bl + B2X· + U· ~)
1
· = y.- y X·= x.- X- Rf.<"i:ld 
I l l ~l(!l I I ' I I ' 
% I 
P.T.O. 
( 4 ) 7033 
2. (a) Suppose that you are considering opening a restaurant at a location where average traffi~ 
volume is 1000 cars per day. To help you decide whether to open the restaurant or 
not. you collect data on daily sales (in thousands of rupees) and average traffic volume 
(in hundreds. of cars per day) for a random sample of 22 restaurants. You set up your 
model as : 
You know that L xyi = 17170, 1: Xf = 13055, Y = 32, X = 22.5. 
(i) Obtain the ordinary least square estimator of the slope coefficient and interpret it. 
(ii) Estimate the average sales for your potential restaurant location. 
. . . 
(iii) Will the value of the coefficient of determination change if you want to change the 
unit of measurement of sales from thousands of rupees to rupees, leaving units of 
traffic _volume unchanged ? Explain your answer. [5] 
(h) The following demand equation was estimated using monthly data on mineral water 
consumption, numbers in parentheses are standard errors : 
-
In Q
1 
= 1.534 - 0.750 ln Pt + 0.251 In P
1
' 
se = (0.2011) (0.1012) (0.2001) 
( 5 ) 7033 
where: 
Q
1 
= millions of one litre mineral water bottles sold 
' 
Pt = price of one litre mineral water bottle 
pi* = price of one litre soda beverage bottle 
(i) Interpret the slope coefficients. 
(ii) Test, at 5% level of significance, whether the demand for mineral water is perfectly 
inelastic or not. [5] 
(c) Why is heteroscedasticity usually found in cross-sectional data? Briefly explain the method 
of weighted least squares used in the presence of heteroscedasticity. [5] 
. ' 
( 31) l1R fllf~~ fcn 31Pl ~ -Q:B ~ lR ~fi)~o;: ~· Cfil ~ Cf11: ~ % ~ 
£lldl£lld Cf1T ~ -qr?rT ~fdfu"i 1000 cnR % I ~@o;: ~ ~ ?:IT ~ ~ 
f.ruP:J if 31'-liT fl~llldl %TI 31Pl 22 ~fi)~o;: ~ ~ £ll~f-6€§Ch ~fd~!(f %TI ~ 
~ c~ m if) cr llldl£11(1 Cf1T ~ -qr?fT e-m CFiR !>lfaf~1) w ~ 
~ Cfl@ % I 31rl f.:tJ:r1f(1f~d ~ .Cfil f.:l1:rtur Cfl@ % 
31rl ~ % fcf> : I. XiYi = 17170, I. x; = 13055, Y = 32, X = 22.5. 
U) cm1 ~ ~ 'fll'tffi'UT '"1"1dt=t crt· 3"11ChC1Ch >f11.(f Cfilf\51~ cr. ~ &:~1&41 
ctilf~~ I 
P.T.O . 
. ·