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Question: considering the following economic model of wages and education wageb0b1educu...

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Considering the following economic model of wages and education: wage-b0+b1educ+u, where wage is the individuals hourly wage, educ is the individuals years of schooling, u is the error and b0 and b1 are population parameters Do you expect b1 to be positive or negative. Explain your answer. [2 points] Explain intuitively how an OLS regression fits the relationship between wage and education. [3 points) ii. Showing all of your working, derive the OLS estimators of b0 and b1. [6 points]

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