The purpose of this exercise is to compare the estimates and standard errors obtained by correctly using 2sls with those obtained using inappropriate procedures. use the data file wage2.csv. (a) use a 2sls routine to estimate the equation log(wage) = β0 + β1educ + β2exper + β3tenure + β4black + u, where sibs is the iv for educ. report the results in the usual form.

Suppose either computers or televisions can be assembled with the following labor inputs: units produced 1 2 3 4 5 6 7 8 9 10 total labor used 3 7 12 18 25 33 42 54 70 90 (a) draw the production possibilities curve for an economy with 54 units of labor. label it p54. (b) what is the opportunity cost of the eighth computer? (c) suppose immigration brings in 36 more workers. redraw the production possibilities curve to reflect this added labor. label the new curve p90.