Questions and Answers
Distinguish between absolute and relative change.
Absolute change describes the actual increase or decrease from a reference value to a new value. Relative change is the size of the absolute change in comparison to the reference value and can be expressed as a percentage.
Give an example that illustrates how a relative change is calculated.
If the new value is 50 and the reference value is 20, then the relative change is {(50-20)/20} x 100 = 150%.
Distinguish between absolute and relative difference.
Absolute difference is the actual difference between the compared value and the reference value. Relative difference describes the size of the absolute difference in comparison to the reference value and can be expressed as a percentage.
Give an example that illustrates how to calculate a relative difference.
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Explain the difference between the key words 'of' and 'more than' when dealing with percentages.
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Study Notes
Absolute vs. Relative Change
- Absolute change measures the actual increase or decrease from a reference value to a new value.
- Relative change expresses the size of absolute change relative to the reference value, often as a percentage.
Example of Relative Change Calculation
- For a new value of 50 and a reference value of 20, the relative change is calculated as:
- [((50 - 20) / 20) \times 100 = 150%]
Absolute vs. Relative Difference
- Absolute difference is the straightforward difference between the compared value and the reference value.
- Relative difference indicates the size of the absolute difference compared to the reference value, expressed as a percentage.
Example of Relative Difference Calculation
- If the compared value is 50 and the reference value is 45, the relative difference is calculated as:
- [((50 - 45) / 45) \times 100 = 8.3%]
Key Words in Percentage Context
- "More than" indicates the relative change between the reference and compared values.
- "Of" indicates the ratio of the compared value to the reference value.
- If a compared value is P% more than the reference value, it is expressed as ((100 + P)%) of the reference value.
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Description
This quiz focuses on key concepts of absolute and relative change in economics. It provides definitions and examples to help clarify these important terms. Perfect for students preparing for Econ 130.
