Question

The correlation coefficient for the cost and size of storage containers is 0.52. How are the cost and container size related

Answer 1

A correlation coefficient is a statistical measure of the degree to which changes to the value of one variable affects change to the value of another.

Correlation coefficients are expressed as values between +1 and -1. A

coefficient of +1 indicates a perfect positive correlation: A change in the value of one variable will affect a change in the same direction in the second variable.

A coefficient of -1 indicates a perfect negative correlation: A change in the value of one variable predicts a change in the opposite direction in the second variable.

Lesser degrees of correlation are expressed as non-zero decimals. A coefficient of zero indicates there is no relationship between fluctuations of the variables.

∴ It's a positive correlation of 0.52, so as the box gets bigger the cost goes up. However, the cost goes up at only half the rate of increase of the size (bigger boxes are cheaper per unit volume).

Answer 2

There is a positive correlation between both variables.

Explanation:

That is to say, the relation between the cost and the size of the storage containers is growing.

As the size of the container increases the cost also increases.

The closer the correlation coefficient is to 1, the stronger is the positive relationship between the variables, in this case r = 0.52, so it could be concluded that the relationship between the variables is a medium positive correlation