Understanding Correlation and Correlation Coefficient

The video tutorial introduces the concept of correlation and its types: negative, positive, and no correlation. It uses examples like rice and onion prices to explain these concepts. The tutorial also discusses the limitations of scatter diagrams and introduces Karl Pearson's coefficient of correlation, which provides a mathematical value to measure correlation strength.

What happens to the quantity sold when the price of rice increases?

• It fluctuates randomly

• It decreases

• It increases

• It remains the same

What is the term used to describe the relationship when the price increases and the quantity sold decreases?

• Positive correlation

• No correlation

• Negative correlation

• Inverse correlation

What is a scatter diagram used for?

• To measure the exact price of goods

• To visualize the relationship between two variables

• To calculate the total quantity sold

• To determine the quality of goods

In the example of onion prices, what is observed about the quantity sold?

• It increases significantly

• It decreases significantly

• It fluctuates wildly

• It remains relatively constant

What type of correlation is observed when the price of luxury goods increases and the demand also increases?

• Negative correlation

• Inverse correlation

• No correlation

• Positive correlation

Why do customers buy more luxury goods even when the price increases?

• They believe higher price means higher quality

• They have no other options

• They are unaware of the price increase

• They are influenced by advertisements

What was the limitation of using scatter diagrams according to statisticians?

• They were too complex to understand

• They were outdated

• They did not provide a mathematical value

• They were only useful for luxury goods

Who introduced the coefficient of correlation to provide a mathematical value?

• Isaac Newton

• Albert Einstein

• Karl Pearson

• Galileo Galilei

What does a correlation coefficient value of 1 indicate?

• Very high correlation

• Slight positive correlation

• No correlation

• Strong positive correlation

What is the symbol used for Karl Pearson's coefficient of correlation?

• Q

• P

• S

• R