Econometrics OLS Question 1. Let y N(X beta, sigam^2 IN) where X is T x K matrix, define OLS estimator as beta. Show following What is the relation between above three parts. Show by formula and briefly comment on your findings. Solution The image is not visible. If you can repost the image, I would be solve the question..

1. Economic agents make decisions in particular models. These models do not need to be related to
financial contexts, and economics can be used to describe how agents will act in any other field
in which humans act.
As an example, how would economic principles be applied to the process of a democratic
election?
Solution
Long story short: Preferences orderings are over more abstract outcomes instead of money. It's
still a story of maximizing expected utility.
Agents are usually assumed to have preferences over outcomes. This is assuming something like
consequentialism. In financial models, the outcomes are dollar amounts and so there is a natural
preference ordering. In something like a political model, outcomes are policies. So, people have
indirect preferences over political candidates based on beliefs and seek to influence the outcome
by voting. This is probably a bad model of voting, as most people don't honestly believe their
vote matters I'm guessing.
Beyond voting to influence current decision-making, here is a good paper about voting as
communicating: Piketty (2000)