Alright, so now let's do a quick review on interpreting graphs. Alright? We've been making them up to this point. Now let's analyze them a little bit. So first let's define these two points, these two terms. We've got correlation, which is the relationship between two variables that allows us to predict outcomes, right? So things are thought to be correlated if we are able to make predictions based on this information. And our next term here, causation, it's a relationship where one event triggers another one. So this is one thing causes another thing. This is basically a cause and effect relationship, right? So causation, cause and effect. So let's look at an example here. We've got a graph here with outside temperature on the x-axis and ice cream sales on the y-axis. So what I'm trying to point out is that as the temperatures rise, people are going to buy more ice cream, so we might see a graph something like this, right, where as the temperature is rising, so are the sales of ice cream. Cool? And the idea here is right we see outside temperature going up, sales going up. This relationship what we see when they go up together or down together, this is called a positive correlation. Positive correlation, and it's also sometimes called a direct relationship. So this is when we see something like the x values going up, then the y value is also going up, or when the x value goes down, same thing, the y value is also going to go down. Right. So up together or down together is a positive relationship compared to what we call a negative relationship or an inverse relationship, that's when they move opposite. So that would be something where we see the x value going up. Keep it consistent with the colors there. We'll see the y value going down and the opposite, right. X going down and y going up. So let's think of an example of a negative or an inverse relationship. Let me get out of the way. We'll put a little graph right here. So maybe a negative relationship might be something, let's do a little one. Maybe we've got, you know, number of missed classes or let's say absences over here. Absence from class. And over here we'll put your grade. Right? So the idea is while absences are low so if you've got 0 absences, you might have a really high grade, and as the absences go up, your grade falls, right? So this is a negative relationship. The absences are going up and your grade is going down. Cool? So now in the next video, we'll do a little more discussion about interpreting graphs and some of the pitfalls that you might run into.
Table of contents
- 0. Basic Principles of Economics1h 5m
- Introduction to Economics3m
- People Are Rational2m
- People Respond to Incentives1m
- Scarcity and Choice2m
- Marginal Analysis9m
- Allocative Efficiency, Productive Efficiency, and Equality7m
- Positive and Normative Analysis7m
- Microeconomics vs. Macroeconomics2m
- Factors of Production5m
- Circular Flow Diagram5m
- Graphing Review10m
- Percentage and Decimal Review4m
- Fractions Review2m
- 1. Reading and Understanding Graphs59m
- 2. Introductory Economic Models1h 10m
- 3. The Market Forces of Supply and Demand2h 26m
- Competitive Markets10m
- The Demand Curve13m
- Shifts in the Demand Curve24m
- Movement Along a Demand Curve5m
- The Supply Curve9m
- Shifts in the Supply Curve22m
- Movement Along a Supply Curve3m
- Market Equilibrium8m
- Using the Supply and Demand Curves to Find Equilibrium3m
- Effects of Surplus3m
- Effects of Shortage2m
- Supply and Demand: Quantitative Analysis40m
- 4. Elasticity2h 16m
- Percentage Change and Price Elasticity of Demand10m
- Elasticity and the Midpoint Method20m
- Price Elasticity of Demand on a Graph11m
- Determinants of Price Elasticity of Demand6m
- Total Revenue Test13m
- Total Revenue Along a Linear Demand Curve14m
- Income Elasticity of Demand23m
- Cross-Price Elasticity of Demand11m
- Price Elasticity of Supply12m
- Price Elasticity of Supply on a Graph3m
- Elasticity Summary9m
- 5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m
- Consumer Surplus and Willingness to Pay38m
- Producer Surplus and Willingness to Sell26m
- Economic Surplus and Efficiency18m
- Quantitative Analysis of Consumer and Producer Surplus at Equilibrium28m
- Price Ceilings, Price Floors, and Black Markets38m
- Quantitative Analysis of Price Ceilings and Price Floors: Finding Points20m
- Quantitative Analysis of Price Ceilings and Price Floors: Finding Areas54m
- 6. Introduction to Taxes and Subsidies1h 46m
- 7. Externalities1h 12m
- 8. The Types of Goods1h 13m
- 9. International Trade1h 16m
- 10. The Costs of Production2h 35m
- 11. Perfect Competition2h 23m
- Introduction to the Four Market Models2m
- Characteristics of Perfect Competition6m
- Revenue in Perfect Competition14m
- Perfect Competition Profit on the Graph20m
- Short Run Shutdown Decision33m
- Long Run Entry and Exit Decision18m
- Individual Supply Curve in the Short Run and Long Run6m
- Market Supply Curve in the Short Run and Long Run9m
- Long Run Equilibrium12m
- Perfect Competition and Efficiency15m
- Four Market Model Summary: Perfect Competition5m
- 12. Monopoly2h 13m
- Characteristics of Monopoly21m
- Monopoly Revenue12m
- Monopoly Profit on the Graph16m
- Monopoly Efficiency and Deadweight Loss20m
- Price Discrimination22m
- Antitrust Laws and Government Regulation of Monopolies11m
- Mergers and the Herfindahl-Hirschman Index (HHI)17m
- Four Firm Concentration Ratio6m
- Four Market Model Summary: Monopoly4m
- 13. Monopolistic Competition1h 9m
- 14. Oligopoly1h 26m
- 15. Markets for the Factors of Production1h 33m
- The Production Function and Marginal Revenue Product16m
- Demand for Labor in Perfect Competition7m
- Shifts in Labor Demand13m
- Supply of Labor in Perfect Competition7m
- Shifts in Labor Supply5m
- Differences in Wages6m
- Discrimination6m
- Other Factors of Production: Land and Capital5m
- Unions6m
- Monopsony11m
- Bilateral Monopoly5m
- 16. Income Inequality and Poverty35m
- 17. Asymmetric Information, Voting, and Public Choice39m
- 18. Consumer Choice and Behavioral Economics1h 16m
1. Reading and Understanding Graphs
Interpreting Graphs, Correlation, Causation, and Omitted Variables
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