Consider the following DGP:earnings = 10 + 10 ∗ schooling + 1 ∗ exper,whereearnings  is hourly earnings in NZDschooling is years of completed schoolingexper is years of work experience.According to this DGP, completing one more year of schooling will have the following effect on earnings:

With just a high school education, it is expected that:A.annual earnings and job choices will be similar to those with a technical education.B.people will earn significantly more than those with a technical education.C.annual earnings will be lower and job choices will be more limited.D.annual earnings will be higher than those with a professional degree.

The slope of the wage-schooling locus provides an estimate of theGroup of answer choiceseconomic return to an additional year of schooling.marginal cost of an additional year of schooling.average years of education as a function of age.economic cost of an additional year of schooling.average wage or salary of workers for a given level of schooling.

(a)A financial magazine conducted a survey. It showed that a person with more years of education tends to have a higher salary. What is likely true?There is no correlation between years of education and salary.There is a correlation between years of education and salary. There may or may not be causation. Further studies would have to be done to determine this.There is a correlation between years of education and salary. There is probably also causation. This is because there is an increase in salary with an increase in the years of education.(b)A grocery store collected sales data. It found that a change in price does not imply that people will buy more or less milk. What can we determine from this information?There is no correlation between price and amount of milk bought.There is a correlation between price and amount of milk bought. However, there is no causation. This is because there is likely a decrease in the amount of milk bought with an increase in the price.There is a correlation between price and amount of milk bought. There may or may not be causation. Further studies would have to be done to determine this.(c)Ms. Roberts studied her students' Spanish test scores and TV habits. She found that students who watched less TV tended to earn higher scores on the test. What conclusion should she make?There is no correlation between test score and amount of TV watched.There is a correlation between test score and amount of TV watched. There is probably also causation. This is because there is an increase in a student's test score with a decrease in the amount of TV watched.There is a correlation between test score and amount of TV watched. There may or may not be causation. Further studies would have to be done to determine this.

A researcher wants to determine if preschool attendance is associated with high school graduation for low-income students. She randomly assigns low-income children to two groups; one group will attend preschool program, the second group will not attend preschool. The researcher plans to follow the children in the study for 20 years and observe whether or not they graduate from high school.Which of the following is the explanatory variable in this study? The income status of the children Whether or not a subject attends preschool Whether or not a subject graduates high school The length of time it takes a subject to graduate high school

Question 6People with more years of education tend to earn more money. This proves that...Education is good for people`s life outcomesRich parents are more likely to encourage their children to go to universityBoth A and BNeither A nor B