No written by hand solution 1. The following table gives the joint probability distribution between employment statusand college graduation among those either employed or looking for work (unemployed)in the working-age U.S. population for 2012.Joint Distribution of Employment Status and College Graduation in the U.S. PopulationAged 25 and Older, 2012Unemployed (Y-0) Employed (Y-1) Total0.639Non-college grads (X-0) 0.053College grads (X-1)0.015Total0.0680.5860.3460.9320.3611.000a. Compute E(Y).b. The unemployment rate is the fraction of the labor force that is unemployed.Show that the unemployment rate is given by 1-E(Y).c.Calculate E(YX-1) and E(YX-0).d. Calculate the unemployment rate for (1) college graduates and (ii) non-collegegraduates.e. A randomly selected member of this population reports being unemployed. Whatis the probability that this worker is a college graduate? A non-college graduate?f. Are educational achievement and employment status independent? Explain.

( According to Bartleby Guidelines we are only allowed to answer 3 sub parts of a question at a…

Answered: a. Compute E(Y). b. The unemployment…

a. Compute E(Y). b. The unemployment rate is the fraction of the labor force that is unemployed. Show that the unemployment rate is given by 1-E(Y). c. Calculate E(YX-1) and E(YX-0).

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter18: Income Distribution And Poverty

Section: Chapter Questions

Problem 4QFR

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Question

No written by hand solution

1. The following table gives the joint probability distribution between employment status
and college graduation among those either employed or looking for work (unemployed)
in the working-age U.S. population for 2012.
Joint Distribution of Employment Status and College Graduation in the U.S. Population
Aged 25 and Older, 2012
Unemployed (Y-0) Employed (Y-1) Total
0.639
Non-college grads (X-0) 0.053
College grads (X-1)
0.015
Total
0.068
0.586
0.346
0.932
0.361
1.000
a. Compute E(Y).
b. The unemployment rate is the fraction of the labor force that is unemployed.
Show that the unemployment rate is given by 1-E(Y).
c.
Calculate E(YX-1) and E(YX-0).
d. Calculate the unemployment rate for (1) college graduates and (ii) non-college
graduates.
e. A randomly selected member of this population reports being unemployed. What
is the probability that this worker is a college graduate? A non-college graduate?
f. Are educational achievement and employment status independent? Explain.

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Step 1: Introduce the concept of joint probability ditribution.

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Step 2: Part a. Compute E(Y).

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Step 3: Part b. Show that unemployment rate is given by 1- E(Y).

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Step 4: Part c. Calculate E(Y|X= 1) and E(Y|X= 0).

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