Suppose we want to know the impact of years of education on hourly wage (in dollars). Based on our sample, we estimate that wage ​
i
​
=8+0.5 education i
​
. a) Interpret β
^
​
0
​
and β
^
​
1
​
in this economic context. b) Do you think β
^
​
1
​
is biased? (Hint: think about what's in the error term). c) What is the predicted hourly wage for someone with only 9 years of education? d) Suppose Mickey and Minnie Mouse both have 16 years of education. We observed that Mickey is making $15 per hour and Minnie is making $21 per hour. Calculate the residuals for Mickey and Minnie. e) True or False: we should always drop observations that have missing data. Explain why.