A regression specification must include A) the functional ...

[schs14]

A regression specification must include
 
  A) the functional relationship between dependent and explanatory variables.
  B) the estimated coefficients.
  C) the estimated t-statistic.
  D) All of the above.

Question 2

A good salesperson can sell 100,000 worth of goods, while a poor one can sell only 10,000 worth of goods. Job applicants know if they are good or bad, but the firm does not.
 
  A firm will offer job applicants a choice between a fixed salary of 2,000 or a commission on the sale. Assume risk-neutral salespersons and no opportunistic behavior. Given that the firm wants to distinguish a prospective good salesperson from a poor one, what should be the commission on sales? A) Commission should be larger than 50.
  B) Commission should be larger than 40.
  C) Commission should be between 2 and 20.
  D) Commission should be smaller than 2.

[josephsuarez]

Answer to Question 1

A

Answer to Question 2

C

[schs14]

TYSM

[ghepp]

Gracias!