Prof. Ken Chay Department of Economics Fall Semester, 2005 ECON 142 SKETCH OF SOLUTIONS FOR APPLIED EXERCISE #2 Question 1: a. Below are the scatter plots of hourly wages and log-wages on the y-axes and education on the x-axis, respectively. In both figures, there appears to be evidence of heteroskedasticity in the variance of the outcome with respect to education. Notice how the dispersion of ...