Ratio (Logarithmic) Scale

… a core concept in Macroeconomic Policy

Click for MRU video, minute 0.30

Click for MRU video, minute 0.30

Concept description

With a ratio scale (also called logarithmic scale) a unit of distance along an axis represents an equal ratio (e.g., a doubling) in the value.

This is illustrated in the image on the right (from Alex Tabarrok, reference below) where each tick on the vertical axis represents a doubling in real GDP per capita. When a ratio scale is used on the vertical axis and time is plotted on a linear scale on the horizontal axis, a constant rate of growth will produce a straight line.

The logarithmic scales are explained in more detail at the Khan Academy at https://www.khanacademy.org/math/algebra2/exponential-and-logarithmic-functions/logarithmic-scale/v/logarithmic-scale, accessed 22 April 2016.

MRU practice questions

See http://www.mruniversity.com/node/329132, accessed 22 April 2016.

  1. Which graph below is drawn with a ratio scale?

Source

Alex Tabarrok, Basic Facts of Wealth, Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-macroeconomics/gdp-per-capita-purchasing-power-parity-example, accessed 22 April 2016.

Atlas topic and subject

Wealth of Nations and Economic Growth (core topic) in Macroeconomic Policy.

Page created by: Ian Clark, last modified on 22 April 2016.

Image: Alex Tabarrok, Basic Facts of Wealth, Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-macroeconomics/gdp-per-capita-purchasing-power-parity-example, accessed 22 April 2016.