F ILE Consider the m onthly rent o f a home in Ann Arbor, Michigan (Rent) as a function o f the num ber of bedrooms (Beds), the num ber o f bathrooms (Baths), and square footage (Sqft).

a. Access the data labeled Ann Arbor Rental from the text website and estimate Rent = 1 0 + β1 Beds + β 2Baths +

β 3Sqft + ε .

b. Which of the explanatory variables m ight cause heteroskedasticity in the model? Explain.

c. Use residual plots to verify your economic intuition.