Consider the model with a single observed explanatory variable, where i denote the cross- sectional unit and t the time period. Yit = o +80d2, + x +; + U, t = 1, 2. In the notation yit, i denotes the person, firm, city, and so on, and t denotes the time period. The variable d2+ is a dummy variable that equals zero when t=1 and one when t=2; it does not change across i, which is why it has no i subscript. Therefore, the intercept for t=1 is o, and the intercept for t=2 is 0 + 80. (i) Interpret and define the a; variable. Provide the definition of a; which is used in applied work. (ii) Define the given model. Which variable is referred in applications as unobserved heterogeneity? (iii) (iv) Interpret and define the uit.