KEY TERMS PRESENTATION

Key terms

PresentaTION

MAD MATH WITH DA BARCLUB

INDEX

INDEX

INDEX

INDEX

INDEX

nominal DATA and real data

scale factor

nominal data

what is nominal data?

definition

Nominal data are the original, raw data such as those listed in tables in the previous sub-section. These are based on the prices that prevailed at the time.

REAL DATA

Real data are the values that have been adjusted to take inflation into account.

example

A country has a 5000$ GDP for selling apple with the price 1$/kg in Year 1. In Year 2, the GDP increase to 6000$ and the price also rise to 1.25$/kg. What will happen if we can sell the quantity of Year 2 with the price of Year 1?

GDP1 = 5000$ P1 = 1$/kg

GDP2 = 6000$ P2 = 1.25$/kg

solution

GDP1 = P1.Q1=> Q1 = 5000/1 = 5000 GDP2 = P2.Q2 => Q2 = 6000/1.,5 = 4000

scale factor

definition

what is scale factor?

The multiplier that gives the final value in percentage problems. A scale factor ratio can be expressed as a fraction, a/b, or a colon, a:b

If the percentage rise is r%, then the final value consists of the original (100%) together with the increase (r%), giving a total of 100/100 + r/100 = 1 + r/100 , This number is called the scale factor for an r% increase.

If the percentage fall is r%, then the final value consists of the original (100%) together with the decrease (r%), giving a total of 100/100 - r/100 = 1 - r/100 , This number is called the scale factor for an r% decrease

example

Find the overall percentage change in the price of a good if it rises by 5% in a year but is then reduced by 30% in a sale.

Reference: p204.

Solution

The individual scale factors are 1.05 and 0.7, so the overall scale factor is 1.05 × 0.7 = 0.735 The fact that this is less than 1 indicates that the overall change is a decrease. Writing 0.735 = 1 - 0.265 = 1 - 26.5% we see that this scale factor represents a 26.5% decrease.

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"MAD MATH WITH THE BARCLUB"

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