Explain why correlation does not always imply causation. Does causation always imply positive correlation? Explain your answer
What will be an ideal response?
Correlation means that there is a relationship between two variables; as one variable changes, another variable changes. Causation occurs when one variable directly affects another through a cause-and-effect relationship. Correlation suggests that there is some kind of connection, but not necessarily a cause and an effect. For example, number of storks in a region might be correlated with the number of babies born in the region. But this doesn't mean that storks bring babies.
Positive correlation implies that two variables tend to move in the same direction. However, causation need not only imply positive correlation. For example, an increase in the price of bacon may cause people to buy smaller amounts of bacon. In this example, the price of bacon and the quantity of bacon purchased will show a negative correlation.
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Ed and Wendy decide to make extra money working by painting names on coffee mugs and making sketches. Ed can paint 6 mugs or draw 2 sketches per hour. Wendy can paint 8 mugs or make 3 sketches per hour. Wendy has _____.
(A) An absolute advantage over Ed. (B) Greater natural resources than Ed. (C) More specialized production than Ed. (D) A comparative advantage over Ed.