Price of beef. How is the price of beef related to other factors? The data in the following table give information on the price of beef (PBE) and the possible explanatory variables: consumption of beef per capita (CBE), retail food price index (PFO), food consumption per capita index

(CFO), and an index of real disposable income per capita

(RDINC) for the years 1925 to 1941 in the United States.

a) Use computer software to find the regression equation for predicting the price of beef based on all of the given explanatory variables. What is the regression equation?

b) Produce the appropriate residual plots to check the assumptions.
Is this inference appropriate for this model?
Explain.

c) How much variation in the price of beef can be explained by this model?

d) Consider the coefficient of beef consumption per capita (CBE). Does it say that that price of beef goes up when people eat less beef? Explain.

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Year PBE CBE PFO CFO RDINC 1925 59.7 58.6 65.8 90.9 68.5 1926 59.7 59.4 68 92.1 69.6 1927 63 53.7 65.5 90.9 70.2 1928 71 48.1 64.8 90.9 71.9 1929 71 49 65.6 91.1 75.2 1930 74.2 48.2 62.4 90.7 68.3 1931 72.1 47.9 51.4 90 64 1932 79 46 42.8 87.8 53.9 1933 73.1 50.8 41.6 88 53.2 1934 70.2 55.2 46.4 89.1 58 1935 82.2 52.2 49.7 87.3 63.2 1936 68.4 57.3 50.1 90.5 70.5 1937 73 54.4 52.1 90.4 72.5 1938 70.2 53.6 48.4 90.6 67.8 1939 67.8 53.9 47.1 93.8 73.2 1940 63.4 54.2 47.8 95.5 77.6 1941 56 60 52.2 97.5 89.5