Does this graph give a visual depiction of Engels law?.

a. (3 points) What is the data generating process? Wh Show more (18 points) GRAPHS AND DESCRIPTIVE STATISTICS. a. (3 points) What is the data generating process? What are the units of measure of the two variables? 1 Quoted from D. Perthel Engels Law Revisited International Statistical Review Vol. 43 No. 2 1975 pp. 211-218. Engels original article was titled (in English) The Relations of Production and Consumption in the Kingdom of Saxony published in 1857. b. (5 points) Generate two histograms one of income and another for food expenditures. Also present a well designed table of descriptive statistics to accompany each histogram. Describe concisely in words the distributions of income and food expenditure. c. (5 points) Generate an x-y scatterplot with income on the horizontal axis and food expenditure on the vertical axis. Report the correlation between the two variables. Does this graph give a visual depiction of Engels law? d. (5 points) Generate an x-y scatterplot with income on the horizontal axis and percentage of income spent on food expenditure on the vertical axis. Report the correlation between the two variables. . Does this graph give a visual depiction of Engels law? 2. (32 points) SIMPLE REGRESSION AND INTERPRETATION (10 points) Estimate a simple regression for the following equation FoodExpi = a + b Incomei + ei i =1? 235 Report the estimated coefficients their standard errors the t-statistics p-values and R2 in a neatly designed table (not just the standard output from Excel). (7 points) How do you interpret the estimated coefficient for the y-intercept (a) ? What are its units of measure? (8 points) How do you interpret the estimated coefficient for the slope of the regression line (b) ? What are its units of measure? (7 points) Generate an x-y scatterplot with income on the horizontal axis and food expenditure on the vertical axis and superimpose the estimate regression line. Label everything clearly. Extra Credit (5 points) In the scatterplot of income and food expenditure from part (1c) you notice that range of food expenditures widens as income increases. Why does that occur? What is the implication of this phenomenon for predicted values of food expenditure?