Question about OLS and partial differentiation

#1
Hello, we're currently studying OLS in my uni class and they gave us an exercise that we should take a look at. Here's a screenshot of the exercise: https://puu.sh/BXSoi/2719c4fdbf.png How would you proceed to answer the first and second questions? I tried to multiply the model by Mz to be able to estimate only B (model 2) but I kinda lost myself in the process...
Thanks, any help would be greatly appreciated :)