7.Suppose Equation 2 is the correct model. That is, Age is a determinant of a person's carnings. Are older people more likely than younger people to have a college degree in this sample?(A) Older people are more likely to have a college degree. (B) Younger people are more likely to have a college degree.(C) All people are equally likely to have a college degree. (D) We don't have sufficient information to answer this question. (E) None of the above choices (a)-(d).

8. Which of the following is false? (A)If all Gauss-Markov conditions are satisfied, the OLS estimators have the lowest conditional variance among all linear conditionally unbiased estimators. (B) If not all Gauss-Markov conditions are satisfied, the OLS estimators are biased. (C) If the regression error ui is conditionally heteroscedastic, the OLS estimators can still be consistent. (D) If the conditional variance of ui is heteroscedastic and its functional form is known and can be estimated exactly, we may prefer a weighted least square estimator to an OLS estimator because of the efficiency consideration. (E) None of the above choices (a)-(d).

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