Macroeconomics 12th Edition by Michael Parkin

Exercise 3

Explain how we "read" the three scatter diagrams in Fig. 1 and 2.
FIGURE 1 A Scatter Diagram

The table lists the number of tickets sold at the box office and the number of DVDs sold for nine popular movies.
The scatter diagram reveals the relationship between these two variables. Each point shows the values of the two variables for a specific movie. For example, point A shows the point for Fast Five, which sold 27 million tickets at the box office and 2 million DVDs.
The pattern formed by the points shows that there is a tendency for large box office sales to bring greater DVD sales. But you couldn't predict how many DVDs a movie would sell just by knowing its box office sales.
FIGURE 2 Two Economic Scatter Diagrams

The scatter diagram in part (a) shows the relationship between income and expenditure from 2001 to 2011. Point A shows that in 2006, income was $33 (thousand) on the x -axis and expenditure was $31 (thousand) on the y -axis. This graph shows that as income rises, so does expenditure and the relationship is a close one.
The scatter diagram in part (b) shows a weak relationship between unemployment and inflation in the United States during most of the years.