Several individuals in the population are experiencing very high fever levels. The Government hires you as an economist to construct a model to explain variation in the fever levels of individuals. Scientists have developed a new pill. Several individuals took the pill while others did not. Using data for the two groups of individuals, one group (the treatment group which is assigned a value one indicating a person being treated ntook the pill) and the other group, (the control or untreated group is assigned a value zero indicating a person did not take the pill). Assume a sample size of 200 individuals, you run the following regression. Assume that the treatment and untreated (control) groups are similar in characteristics. In addition, assume that the number of years of education, income and age are the other important variables in the model. For simplicity assume that the error term is IID (0; 2) and that the variable fever level is a continuous variable. You are hired to assess the pill.

a. Write down the model to be estimated and explain it. b. Suppose the pill causes the fever level to increase, demonstrate using the model and explain using one

or two sentences? c. Suppose the pill did not have an impact, demonstrate using the model and explain using one or two

sentences?