If the American Medical Association lobbied successfully to eliminate licensing laws for physicians,
a. physicians' salaries would increase
b. the supply curve of physicians would shift to the left
c. physicians' salaries would decrease
d. the supply curve of physicians would become more inelastic
e. the supply curve of physicians would become more elastic
C
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Consider the following simple regression model y = 
0 + 1x1 + u. Suppose z is an instrument for x.
Which of the following statements is true?
A. The condition Cov(z,u) = 0 can be tested statistically.
B. The condition Cov(z,x) 
0 cannot be tested statistically.
C. The instrumental variables estimator is always biased if Cov(x,u) 
0.
D. The ordinary least squares estimator is unbiased if Cov(x,u) 
0 .
Your textbook highlights a debate that has been going on for some years. The issue is whether there should be a corporation tax, given that corporations are nothing more than groups of people. Should there be a corporation tax? Why or why not?
What will be an ideal response?