Problem 1 Consider the following formulations of the two-variable PRF: Model I: Yi = 1 + 2Xi + ui Model II: Yi = 1 + 2 Xi X + ui (a) Find the estimators of 1 and 1. Are they identical? (b) Find the estimators of 2 and 2. Are they identical? Problem 2 Suppose you run the following regression: yi = ^beta 1 + ^beta 2xi + ^ui where, as usual, yi and xi are deviations from their respective mean values. (a) What will be the value of ^beta1? Why? (b) Will ^beta2 be the same as that obtained from Yi = ^beta1 + ^beta2Xi + ^ui Why?