Page 85 - Krugmans Economics for AP Text Book_Neat

figure A.8

Scatter Diagram Standard of Living and Average Life Expectancy
In a scatter diagram, each point represents the Life expectancy
at birth (years)
corresponding values of the x- and y-variables
for a given observation. Here, each point indi- 85 Section I Basic Economic Concepts
cates the observed average life expectancy and
the log of GNP per capita of a given country for a 75
sample of 158 countries. The upward-sloping fit-
ted line here is the best approximation of the 65
general relationship between the two variables.
55
Source: Eduard Bos et al., Health, Nutrition, and Population
Indicators: A Statistical Handbook (Washington, DC: World
Bank, 1999). 45

35

0 4 6 8 10 12
Log GNP (per capita)

the y-variable. In scatter diagrams, a curve is typically fitted to the scatter of points;
that is, a curve is drawn that approximates as closely as possible the general relation-
ship between the variables. As you can see, the fitted curve in Figure A.8 is upward-
sloping, indicating the underlying positive relationship between the two variables.
Scatter diagrams are often used to show how a general relationship can be inferred
from a set of data.
A pie chart shows the share of a total amount that is accounted for by various com-
ponents, usually expressed in percentages. For example, Figure A.9 is a pie chart that
depicts the various sources of revenue for the U.S. government budget in 2005, ex-
pressed in percentages of the total revenue amount, $2,153.9 billion. As you can see, so-
cial insurance receipts (the revenues collected to fund Social Security, Medicare, and
unemployment insurance) accounted for 37% of total government revenue, and indi-
vidual income tax receipts accounted for 43%.

figure A.9

Pie Chart Receipts by Source for U.S. Government Budget 2005
(total: $2,153.9 billion)
A pie chart shows the percentages of a total
amount that can be attributed to various
components. This pie chart shows the per- Corporation
centages of total federal revenues received income taxes
13% Social
from each source.
insurance
Source: Office of Management and Budget. receipts
37%

Individual Excise
income taxes
taxes 3%
43%
Other
4%

appendix Graphs in Economics 43