An omitted variable is A) a variable that has no impact on ...

[bobypop]

An omitted variable is
 
  A) a variable that has no impact on other variables in an economic analysis.
  B) a variable which is purposely omitted from an economic analysis.
  C) a variable that affects other variables and its omission from economic analysis can lead to false conclusions about cause and effect.
  D) a variable which is inadvertently omitted from an economic analysis.

Question 2

What are the key differences among public production, private subsidies, and vouchers?
 
  What will be an ideal response?

[efwsefaw]

Answer to Question 1

C

Answer to Question 2

Public production means that the government is the producer of the product. Private subsidies, however, are given to private producers of the product. Both public production and private subsidies affect the supply-side of the market. Vouchers, however, are given to households to help pay for the product. Vouchers therefore affect the demand-side of the market.