Alcohol and Tobacco Expenditures

1) Graph of Tobacco by Alcohol shows one outlier, identified as Northern Ireland. Graph without NI shows a strong positive linear relationship ( r=0.784, P-Value = 0.007). We will remove NI from the dataset for the rest of this analysis

2) The least squares regression equation is Tobacco = 0.1082 + 0.6115 Alcohol. The Residual vs. Fits plot shows no pattern, and so the linear model is good. The normal plot shows a straight line, so the normal assumption is good. The Residual vs. Fits shows no problem with the equal variance assumption