A scatter diagram plots the value of one variable against the value of another variable for a number of
different values of each variable. It reveals whether a relationship exists between the two variables.
The patterns to look for in graphs are the four cases in which
Variables move in the same direction – positive relationship/direct relationship.
A relationship shown by a straight line is called a linear relationship.
Variables move in opposite directions – negative relationship/inverse relationship.
Variables have a maximum or a minimum.
Variables are unrelated.
When a relationship involves more than two variables, we can plot the relationship between two of the
variables by holding other variables constant—by using ceteris paribus “if all other relevant things
remain the same.”
Economics is the social science that studies the choices that individuals, businesses, governments, and
entire societies make as they cope with sca