An economist with the New Brunswick (NB) government is investigating the relationship between an individual's tax base and the type of municipality in which the individual lives. NB municipalities are in three varieties: village, town, or city. The economics plans to estimate the following model using dummy variables to represent the various types of municipalities in NB. 0 1 2 3 taxbase = income city town u a) (2 points) Explain why the economist did not include an indicator variable for village in the model. b) The economist is tasked to test the following claims. For each of the claims below, state the null and alternative hypotheses and determine the type of test (i.e., t-test, F-test, etc.) i) (2 points) The tax base for individuals in cities is greater than for individuals living in villages. ii) (2 points) The tax base for an individual is the same no matter which type of municipality in which they reside. iii) (2 points) The tax base for individuals in a town and in a city are the same. c) (2 points) What model would you have to estimate if you thought the effect of income on tax base was different for people who