Quiz 13 Version A

(1)c. (2)c. (3)c. (4)d. (5)b. (6)b. (7)c. (8)a. (9)b. (10)e.

Quiz 13 Version B

(1)b. (2)c. (3)c. (4)b. (5)c. (6)d. (7)a. (8)a. (9)a. (10)b.

Test 13 Version A

(1) [Effects of regulation on cost: 28 pts]

1. $2.
2. $11 thousand.
3. 9 thousand.
4. $4 thousand.
5. $36 thousand.
6. $18 thousand.
7. $22 thousand

(2) [Effect of regulation on quality: 28 pts]

1. 4 million.
2. 5 million.
3. 0 million.
4. $4 million.
5. 5 million.
6. $2 million.
7. $6 million.

(3) [Maximum prices and exit restrictions: 20 pts]

1. $2 million.
2. $16 million.
3. $5.
4. $8 million.
5. $10 million.

(4) [Measuring effects of regulation: 16 pts]

1. Difference-in-differences approach.
2. Event-study approach.
3. Cross-section market comparison approach.
4. Intertemporal approach.

Critical thinking [8 pts]

• Data should be collected on employment in Minnesota and Iowa, before and after the change in Minnesota's minimum wage. Iowa is the "control" market because there was no change in the minimum wage in that state. The change (or difference) in employment in Minnesota over time, and the change in employment in Iowa over time should both be computed. The difference-in-differences estimate of the effect of the minimum wage change on employment equals the Minnesota change minus the Iowa change.

Test 13 Version B

(1) [Effects of regulation on cost: 28 pts]

1. $2.
2. $12 thousand.
3. 8 thousand.
4. $4 thousand.
5. $16 thousand.
6. $8 thousand.
7. $12 thousand

(2) [Effect of regulation on quality: 28 pts]

1. 6 million.
2. 6 million.
3. 0 million.
4. $9 million.
5. 4 million.
6. $8 million.
7. $17 million.

(3) [Maximum prices and exit restrictions: 20 pts]

1. $2 million.
2. $12 million.
3. $4.
4. $4.5 million.
5. $6.5 million.

(4) [Measuring effects of regulation: 16 pts]

1. Cross-section market comparison approach.
2. Intertemporal approach.
3. Difference-in-differences approach.
4. Event-study approach.

Critical thinking [8 pts]

• Same as Version A.

[end of answer key]