Question

When Sandra goes grocery shopping, she usually buys flour and cookies. She has noticed a positive correlation between the price of flour and the price of cookies. Which fact would lead you to believe that the relationship between prices is one of causation and not correlation?

• A. Since flour is not one of the main ingredients in cookies, the price of cookies will go up when the price of flour goes down.
• B. Since flour is very costly, the price of cookies will go up when the price of flour goes up.
• C. Since flour is one of the main ingredients in cookies, the price of cookies will go up when the price of flour goes up.
• D. None of these

Answer 1

Answer: (C)

Since flour is one of the main ingredients in cookies, the price of cookies will go up when the price of flour goes up.

Flour is the main ingredient in preparing cookies. So, the price of the cookies will depend upon on the price of the flour. i.e., the price of the cookies will increase when the price of the flour increases.