Phoenix

Stephan Tucker
Levels of Measurement, Simultaneous Equations, and Time Series
9-28-09

Ch. 1, exercise 18
Refer to the Wage data, which reports information on annual wages for a sample of 100
workers. Also included are variables relating to industry, years of education, and gender for
each worker.
Which of the 12 variables are qualitative= QL and which are quantitative=QT?
x1 = Annual wage in dollars QT
x2 = Industry (1 = Manufacturing, 2 = Construction, 0 = Other) QL
x3 = Occupation (1 = Mgmt., 2 = Sales, 3 = Clerical, 4 = Service, 5 = Prof., 0 = Other) QL
x4 = Years of education QT
x5 = Southern resident (1 = Yes, 0 = No) QL
x6 = Non-white (1 = Yes, 0 = No) QL
x7 = Hispanic (1 = Yes, 0 = No) QL
x8 = Female (1 = Yes, 0 = No) QL
x9 = Years of Work Experience QT
x10 = Married (1 = Yes, 0 = No) QL
x11 = Age in years QT
x12 = Union member (1 = Yes, 0 = No) QL

b. Determine the level of measurement for each variable.
x1 = Annual wage in dollars Ratio
x2 = Industry (1 = Manufacturing, 2 = Construction, 0 = Other) Nominal
x3 = Occupation (1 = Mgmt., 2 = Sales, 3 = Clerical, 4 = Service, 5 = Prof., 0 = Other) Nominal
x4 = Years of education Ratio
x5 = Southern resident (1 = Yes, 0 = No) Nominal
x6 = Non-white (1 = Yes, 0 = No) Nominal
x7 = Hispanic (1 = Yes, 0 = No) Nominal
x8 = Female (1 = Yes, 0 = No) Nominal
x9 = Years of Work Experience Ratio
x10 = Married (1 = Yes, 0 = No) Nominal
x11 = Age in years Ratio
x12 = Union member (1 = Yes, 0 = No) Nominal

Ch. 3, problem 3-41High-Low Method
Manchester Foundry produced
45,000 tons of steel in March at a cost of £1,150,000.
35,000 tons in April at a cost of £950,000.
Using only these two data points, determine the cost function for Manchester.

Change in cost / change in activity

Cost activity
1150000 45000
950000 35000

1150000 – 950000= 200000
45000-35000= 10000
200000/10000=20

Fixed cost per month = total mixed cost – total variable cost
F = 1150000 – 20(45000)
F...