An Example of Manipulating a Graphical Display to Distort Reality

question 31

Multiple Choice

An example of manipulating a graphical display to distort reality is ___________.

• A) starting the axes at zero
• B) making the bars in a histogram equal widths
• C) stretching the axes
• D) starting the axes at zero and stretching the axes

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Definitions:

Substitution Effect

The change in consumption patterns due to changes in the relative prices of goods, leading consumers to substitute more expensive items with cheaper alternatives.

Giffen Good

A product that experiences an increase in demand as its price increases, contrary to the law of demand, typically because it is a staple whose cheaper substitutes are not as affordable.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, contrary to normal goods.

Normal Good

A good for which demand increases as the income of consumers increases and vice versa, all else being constant.