Household food consumption. The data in the table below were collected for a random sample of 26 households in Washington, D.C. An economist wants to relate household food consumption, y, to household income, x1, and household size, x2, with the first-order model E1y2 = b0 + b1x1 + b2x2

a. Fit the model to the data. Do you detect any signs of multicollinearity in the data? Explain.

b. Is there visual evidence (from a residual plot) that a second-order model may be more appropriate for predicting household food consumption? Explain.

c. Comment on the assumption of constant error variance, using a residual plot. Does it appear to be satisfied?

d. Are there any outliers in the data? If so, identify them.

e. Based on a graph of the residuals, does the assumption of normal errors appear to be reasonably satisfied? Explain.