Which of the Following Statements Identifies a Difference Between Correlation

question 80

Multiple Choice

Which of the following statements identifies a difference between correlation and causation?

• A) Correlation occurs when one thing directly affects another, whereas causation implies a mutual relationship between two things.
• B) Correlation implies a mutual relationship between two things, whereas causation occurs when one thing directly affects another.
• C) A causal relationship exists between two variables when they are correlated, but correlation does not necessarily exist if there's a causal relationship between two variables.
• D) Causation cannot arise when correlation is present, and correlation cannot arise when causation is present.

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Definitions:

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.

Autarky Price

The price of a good in a country without international trade, determined solely by domestic supply and demand.

International Trade

The trade of products and services across the borders of different countries or territories.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually pay.