Janice is considering buying a new home. She wants to estimate the monthly utilities (heating and air
conditioning). She figures that the utilities are
dependent on the size (square footage) of the home.
She collects data on 10 homes in the neighborhood
and finds a linear model to give the relationship
between the size of the home and the monthly utilities.
The equation of the line is = -8.1 + 1.91x, where ŷ is
the mean monthly cost in utilities and x is the square
footage of the home. The residual plot is shown.