2 Suppose the price of a home yi is positively related to th

2. Suppose the price of a home (yi) is positively related to the number of square feet in the house (xii). The true relation contains no intercept, and we should assume that this model satisfies the M.L.R. assumptions 1-4 but not assumption 5. Instead, the errors are heteroscedastic: The L.S. estimator of the slope is a. Using and stating the rules of variance and any MLR assumptions that are used, derive the expression for the variance of Beta1 that is valid when heteroscedasticity is present. b. Beginning with your final expression in part a, now assume that Var(ui) = Sigma^2u,a constant. Simplify the expression for the show formula for the variance of beta1 that is valid only under homoscedasticity.

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