Four different beverages are sold at a fast-food restaurant: soft drinks, tea, coffee, and bottled water.

a. explain why the type of beverage sold is an example of a categorical variable.

b. explain why the type of beverage sold is an example of a nominal scaled variable.

Categorical variables are the variables that are names or labels of any product. The color of a ball or the breed of an animal etc. Here, the type of beverage sold is the name of beverage and so, it is a categorical variable. The nominal type differentiates between items or subjects based only on their names or some qualitative criteria. Since the type of beverage is differentiated by name, it is a nominal scaled variable.