Difference between causation and correlation

BUSINESS

TABLE OF CONTENTS
Que.1................................................................................................................................................3
Que. 2...............................................................................................................................................3
Que.3................................................................................................................................................4
Que.4................................................................................................................................................5
Que.5................................................................................................................................................5
Que.6................................................................................................................................................6
Que. 7...............................................................................................................................................6
REFERENCES................................................................................................................................7

Que.1
Difference between causation and correlation
Correlation is the mathematical term that determine relationship between two things or events on
the other hand, causation is also a mathematical term but it is quite different from correlation
because it determines the cause, reason for some short phenomena or mathematical figure.
Correlation can not consider causation but causation can consider correlation because it can used
after correlation.
For example, correlation between ice cream sales and sunglasses sold. It interprets by causation
term such as any change in the value of one variable will lead change in the value of other
variable. According to correlation statement can be interpreted by relationship between ice cream
sells and sunglasses and give reason that it sales together because both are outdoor temperature.
Opportunity cost
It is economical term that can be defined to the value of the resource or alternative that
have to give up in order to choose something else.
Que. 2
A) Law of demand
According to the law, price and quantity of the product are inversely proportional to each
other. in other word, when price of the product is high as result decreases demand of the product.
while in other case, when demand of the product high as result decreases price of the product.
there is an specific example such as Smith’s granny used to buy apple only 1 kg due to high
price. But when apple price decreases due to good harvest as result demand of the product
influences.