Final answer:
The equation xy = 1/4 is an inverse variation with the form y = 1/(4x), which contrasts with direct variation where variables change together proportionally.
Step-by-step explanation:
The equation xy = 1/4 represents an inverse variation between the variables x and y. This can be seen as the equation is restructured in the form y = 1/(4x), matching the general format for inverse proportionality, y = k/x, where k remains constant as x and y vary inversely. In contrast to this, direct variation would be in the form y = kx, which depicts a situation where y increases as x increases, often represented graphically as a straight line through the origin (0, 0), indicating a linear relationship between the variables.