Patrick Star
lol
What do we call the point where Mr. Krabs stops crying over losses because total revenue exactly equals total costs?
Break-even point
Sandy builds a model y=β0+β1x+ϵ. What is the term for the variable ϵ, representing the parts of y that science cannot predict?
Residuals
Squidward analyzes a series where the mean and variance do not change over time. What is the name for such a "calm" series?
Stable or Stationary
To save his model, Plankton looks for a variable Z that affects X but is unrelated to the error term. What is this variable called?
Instrument
Patrick tries to predict his weight using "weight in kg" and "weight in grams" at the same time, causing the model to "explode." What is this problem called?
Perfect Multicollinearity
If Mr. Krabs raises the price by 1% and the quantity demanded drops by 5%, how would we describe the elasticity of this demand?
Elastic
Sandy gives u her spacesuit and in it …
+200 points
In an ARIMA(p, d, q) model, what does the parameter p represent?
The order of Autoregression
Plankton is using a "Monte Carlo Method." Does this mean he is gambling away Karen’s money at a casino?
yep, but u get only +1,89 points as a interest rate
Patrick heard that "correlation does not imply causation." He stopped taking showers because every time he does, it rains outside. What logical fallacy is he committing?
After this, therefore because of this
Mr. Krabs found that the income elasticity of demand for Krabby Patties is negative. Does this mean that as he gets richer, he will actually eat fewer Patties?
who knows? -300 points due to Mr. Krabs gets richer
Sandy got an R2=0.99 predicting the weather based on the color of her boots. Why should she check for a "Trend" before publishing her paper?
smth as a difficult regression (Spurious Regression)
Squidward is predicting the amount of noise from SpongeBob. The model shows that noise tomorrow equals noise today + a random "laugh." What is this process called?
random data
If Plankton wants to predict the probability (0 or 1) of whether he will steal the formula or not, which model should he use instead of OLS?
Logit or Probit
for logit +300, for probit +302
Patrick decided to use a correlation method that only looks at the order of data (who is 1st, 2nd, etc.) rather than the exact values. What is this coefficient called?
Spearman's Rank Correlation
What is the term for a measure of how much two variables (like price and demand) change together, but unlike correlation, it is not normalized between -1 and 1?
Covariance
How do you interpret the slope coefficient (β1) if Sandy uses a log-log model: ln(y)=β0+β1ln(x)?
As the elasticity of y with respect to x+400
Squidward in a bad mood via Spongebob
-400
Plankton discovered that his variable X is correlated with the error term. What do econometricians call such a "dirty" variable?
Endogenous
If Patrick compares two datasets that both simply increase over time (like his appetite and the length of the day), he might get a high correlation where there is no actual link. What is this called?
Spurious Correlation
When Marginal Revenue (MR) equals Marginal Cost (MC), what is happening to the profit of the Krusty Krab?
Profit is maximized
What method should Sandy use if she knows the variance of the errors is not constant (heteroscedasticity)?
If answer is OLS - +100
If answer is Generalized Least Squares (GLS) or Weighted Least Squares (WLS) - +500
What procedure (represented by the I in ARIMA) must be performed if a series is non-stationary and has a trend?
Taking first differences (only the first)
What is the name of the test used to check whether you can trust OLS or if you must use Instrumental Variables (a test for endogeneity)?
Hausman Test