# Statistics/Economics Waiver Examinations

Waiver examinations in statistics and economics will be offered at the end of August for those incoming students with adequate prior coursework in these areas. Those who successfully complete either or both of these examinations will not be required to take the relevant core course(s) (Statistics: PAI 721:Introduction to Statistics. Economics: PAI 720: Principles of Economics or PAI 723: Economics for Public Decisions), but will be able to use these credits for additional program of study or elective courses.

Students will have three hours to complete each exam. There is no penalty if a student attempts an exam and does not do well. Students should prepare well for the exam, however, as they may only attempt the waiver exam for each course once. All waiver exams must be completed before the first day of the semester (no exceptions!). Students should sign up to take the exam in Eggers 215. Fall Waiver Exams will be offered at the following dates/times:

Exam Schedule (** NOTE: NEW DATES**)

- Statistics Waiver Exam: Monday, August 17, 9:00 am - 12:00 pm OR 1:00 pm - 4:00 pm
- Economics Waiver Exam: Tuesday, August 18, 9:00 am - 12:00 pm OR 1:00 pm - 4:00 pm

Information to help you prepare for each exam is provided below. Also below are the links to two syllabi for both courses. Please note that the dates are not current on these syllabi.

## Statistics Waiver Exam

The statistics waiver exam is a reasonably straightforward test that consists of three parts – descriptive statistics, probability, and statistical inference.

Descriptive statistics covered in the exam include such things as sample means, medians, variances, standard deviations and simple linear correlation and linear regression coefficients. Calculating such statistics (other than correlation coefficients) may be a part of the exam; however, you will also be expected to know how to interpret the findings reported as descriptive statistics.

The probability section requires knowledge of the basic laws (e.g., addition and multiplication theorems) and concepts (e.g., statistical independence) of probability and the ability to compute joint and conditional probabilities from a set of data. An understanding of the normal probability distribution is also necessary.

The inferential statistics portion of the exam requires the ability to construct and interpret confidence intervals from a set of data as well as stating and testing null hypotheses and interpreting the results. You should be prepared to handle these issues for both a sample from a single population as well as a comparison of samples from two populations. Similarly, it will be necessary to carry out those procedures for both population means and proportions.

You will be allowed to bring a calculator to the exam; however, the exam will be closed book. Necessary statistical tables, e.g., the standard normal, t-distributions, etc., will be provided. Students may also bring one 8 ½’’ x 11’’ sheet of paper with formulas and other helpful information with them.

Students who have taken one or more statistics courses in the past are encouraged to sit for this exam. We strongly suggest, however, that you spend some time reviewing for it since, although the questions are quite basic, they do presume a good working knowledge of the subject and we have found that such knowledge can quickly become rusty without some intensive review.

Almost any good introductory statistics book should provide the necessary basics for review. One book we used in the past is Douglas Lind, William Marchal and Samuel Wathen, Statistical Techniques in Business and Economics, New York: Irwin, McGraw-Hill; the book used this past year was David Moore and George McCabe, Introduction to the Practice of Statistics (5th ed) New York: W.H. Freeman and Company. They can serve as examples of the level of statistics we expect from our students. There are, however, many other comparable texts on the market that will serve equally well.

## Economics Waiver Exam

The economics waiver exam focuses on basic knowledge of microeconomics at the intermediate level. The exam covers four areas of material: supply and demand, consumer theory, producer theory, and public economics.

For supply and demand, students should demonstrate an understanding of how to represent a market using supply and demand curves. You will need to understand what factors affect supply and demand besides price, and what happens to equilibrium price and quantity when these factors change.

For consumer theory, you should be able to use budget constraints and indifference curves to graphically represent a consumer optimum, and demonstrate what happens to the optimum when prices, income, or preferences change. Based on this you should be able to derive income and price expansion paths, and price and income elasticities. You should also be able to represent government policies, such as subsidies, taxes, and in-kind transfers.

For producer theory, you will be tested on key concepts such as determining profit maximizing levels of output and the cost minimizing mix of inputs to use in production. You will need to understand and be able to calculate and graph different cost concepts, such as average and marginal costs. These graphs should be used to find the point of profit maximization, the shutdown price, and long-run competitive equilibrium.

Finally, you should have an understanding of basic concepts in public economics, such as externalities and public goods. This includes a basic understanding of the principles of cost-benefit analysis, including the calculation of present values.

For students who have taken an intermediate level microeconomics course in the past, you should consider taking the waiver exam (especially economics majors). However, we suggest that you prepare for the exam, because we will require a basic mastery of these concepts for passage. Any intermediate textbooks will cover this material (except, possibly, the public economics portion).

The textbook used last year Microeconomics for Public Decisions by Anne C. Steinemann, William C. Apgar, and H. James Brown. For review, a good introductory-level text book may also help, although you should choose one that covers topics such as indifference curves, as not all introductory texts include this level of detail. Some good choices for introductory texts are those by Michael Parkin and by Tregarthen & Rittenberg. These texts won't have quite the depth of material that we'll cover in class, but avoid unnecessary mathematics. Most intermediate microeconomics texts, including the one we use in class, use more math than we cover in class, although they provide more complete coverage of the topics covered during the semester.

## Preparing for the Exams

Additional sample syllabi and exam questions may be found on the PAIA and Executive Student Blackboard page under the resources tab. You may also download a sample PAI 721 syllabus and a sample PAI 723 syllabus.