Tuesday, February 8, 2011
Plotting Demand and Supply Graphs: A Long-held Tradition
As we all know that we place dependent variable on y-axis and independent variable on x-axis as a standard graphic rule when deriving a relationship between two variables. But we don't see this when learning the demand and supply relationships in our pricipal-level economics classes, where price, a independent variable, is on the y-axis and quantity, a dependent variable, is on the x-axis. Why do we do this? There is no specific reason, economists are following just a long-held tradition and don't want to change it (read this). Is any of you confused with the way the graphs are plotted in the textbook? Please share your opinion whether this tradition should be changed.
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Using the current traditional method of plotting demand and supply is great. I would not change it because with this sort of model you can predict economic changes whether growth or not. Since it is displaying both the supply curve and the demand curve it gives you that average (equilibrium) where both can be efficient. Efficiency makes everyone happy. Maximizing all benefits! The graph is very clear and easy to understand. You definitely have to "Think like an Economist" it will make it easier. Keep the tradition going!
ReplyDeleteHaving a background in mathematics is key in understanding basic economic graphical representations and formulas. If you understand the relationships of linear equations, or, for real-world economics, nonlinear equations, then it does not matter whether price is listed on the y or x axis; it is merely a common method for interpretation of raw data. In my opinion, more emphasis should be placed on having calculus experience. If you understand first and second derivatives, as used in basic physics and calculus courses, it makes it easy to understand what's really going on in the entry-level economics class examples.
ReplyDeleteAs far as upholding the tradition of plotting graphs with price on the y-axis, i think that it is straightforward for the student who looks at a graph and can mentally formulate what is going on without much trouble. However, for students who have little experience in basic economic principles, or those who have not been exposed to calculus for an extended period of time, i believe that they are at the least, placed at a disadvantage. I mean this only as a generalization for a large group of students, but it is not inclusive of all individuals in these said situations. Some students are able to pick up on the concepts because the examples used to explain a concept are relatively simple, or familiar to them. However, other students, specifically those who do not have a strong ability to identify these differences (which mind you, at the basic level of our class, should NOT be expected), would more than likely have difficulty understanding why the independent variable is presented on the y-axis.
I do not see a need to change the current way that supply v. demand is plotted. I also agree that it is a pretty straight forward graph that, at first glance can be made sense of. As for tradition, tradition it may just be. Why bother to change it then if it does not presently hinder accuracy within results? If its not broke, dont fix it....
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ReplyDeleteI believe the supply and demand graph is fine the way it is. It's very easy to understand and it gets the point across. The good thing about it is that normal people can understand too and see how the economy works. The people don't necessarily have to be into economics to understand the supply v. demand.
ReplyDeleteHaya Suleiman EI1268
MACRO ECON 9:35-1:15 SATURDAYS
I do not see any reason for the graph to be switched. Especially in classes such as intro economics courses at the high school and college levels. From a more technical or advanced standpoint, I don't know if the graph is "wrong" or not, but it makes sense. These are the graphs we studied 5 years ago in high school economics classes, and these are the graphs in our college textbooks. They are useful in getting the fundamental rules of supply and demand down in a visual form. Granted, these graphs may have formed from tradition, but here they are.. an applicable tradition. They are easy to interpret to almost any level student or any aged person. If we're talking basics, they work just fine. Change them if you must in a 5000+ level course, but I like our graphs just how they are!
ReplyDeleteThey should not change the format but make an adjustment as far as what can effect the variables.(i.e.)National unemployment, not for only people who are looking for work. This process however has been working for quite some time so "if it ain't broke don't fix it".
ReplyDeleteAnthony Talbert(305518)
I personally find the charts understandable and believe I would have the ability to interpret them regardless of what information is listed on each axis and believe the majority of others do as well. My opinion is, if it works leave it be.
ReplyDeleteI agree with the others. I don't find the way economists graph price and quality confusing. I find the graph easy to understand even though its not graphed using the standard graphic rule. When studying the graph it is very simple to view the equilibrium when locating the meeting point of the demand curve and the supply curve. I don't think the tradition should be changed.
ReplyDeleteUtkarsh Patel (004058754)said........
ReplyDeleteI am agree with the others. I do not find any complication in understanding way the economists graph of price and quality label. Even though, it is against the rule of graph in terms of independent and dependent variable, but it make more clear to me. Also it giving us the demand and supply curve graph of economics where the efficient and equilibrium will occur. When I study these two graph i find easier in finding those points, such as; where it could be equilibrium and efficient. If the person who do not know anything about the economics will understand easily through this graph. So, I do not find any reason in make changes in tradition.
I feel that the trdaition should be kept the same. In my opinoin, I feel the traditional way has been sucessful in all the past years. It also helps economist to think harder and remember the correct way of the demand and supply graph. If we keep all graphs the same, we won't ever have to do any research or hard thinking. Everything will be easy to read, which makes us lazy. Therefore, economists should keep the independent and dependent variables where they are.
ReplyDeleteID#004065154
I also agree with most. The supply & demand plot is easily understood by non-economists trying to determine the relationship. The graph has been used for as long as it has without becoming confused with a more scientific understanding of graphs and the typical way of plotting variables. So, with a minor amount of knowledge of the workings of economics, the traditional supply & demand model serves its purpose of displaying the relationship between both.
ReplyDeleteDominique Blockett
I do not think that the graphes should be switched. Although from a technical and mathematical standpoint it would make more sense the other way, I do not think that it causes any real confusion amongst those who study economics. It seems to be just one of those things that has stuck around for so long that changing it would cause more problems than how the graphs currently are.
ReplyDeleteNicholas Recchia (004067913)
I dont agree that the graph should be changed or switched. Since we depend on market forces instead of government forces to give out goods and services and I have no background in economic there MUST be some method for determining who gets the products that are produced. Well the current traditional method is a clear, simple visual illustration of supply and demand-it helps us see immediately any change in supply and demand for a product. A graph can also help you predict what might happen with future.
ReplyDeleteSarme Shabo (ap3599)
I agree that the graph should be switched. If you look at it from a mathematical perspective, the quantity changes as the price does so quantity should be on the Y axis, and price on the X-axis. It is too easy to get them confused, so we should make them standard with math rules because economics does use math.
ReplyDeleteSam Karnan (eh3677)
Econ 2020: Section 006
003865356 I agree with majority of the class keep the tradition going as far as, the same graph because new changes could be hard to understand with certain people and a mix up between the traditional and new. For me I understand the traditional graph better with the X and Y variables which it took me sometime to learn piece by piece so change would definiately confuse me.
ReplyDeleteIn my opinion I agree with the graph of price being on the vertical side and quantity being on the horizontal side. It makes it easier for anyone to understand how the two Supply and Demand works.I understand how the graph is explained in the textbook, it is pretty much straight forward.
ReplyDeleteAmina Begum, Eco 2020
I personally have never been confused by this. When I saw the graphs, it made sense to me. I believe it may be because when we think of the word price, we imagine it rising and going up. Price would not really move towards the right in terms of increasing. Hence, price fits better on the left y-axis. We can clearly remember and understand that price is moving upwards, and then either quantity supplied or demanded is increasing rightwards. Quantity increasing does not have to be necessarily moving in an upward direction. So overall, I do not think they need to change it. Most people don't realize this and do not question it.
ReplyDeleteThis traditional graphic rule is not confusing to me. The y-axis and x-axis relationship has always had an economic bond that defines the other variables in a simple matter. It would help if a brief description of the dependent and independent variables was given at the introduction economics level, but over all the way the graph is portrayed is easily understood. Adding on to this graph might cause confusion at this basic level class. When this graph system is explained in the Economics book, it is using basic math reasoning, thus it fits in with the traditional plotting of the supply and demand graph.
ReplyDeleteHonestly I think some sort of changes could be made. I also think that it could complicate the study of economics if those changes were made so better to keep with tradition. My reasoning behind suggesting some sort of change is that,in reality, the two are constantly pushing at each other. Instead, neither is really the independent variable because the question really could be "If I were buying X widgets, how much would I pay for them?" There really is no "dependant" or "independant" variable the way I see it. Then again, I'm not an economist.
ReplyDeleteThe graphs show solid information that is not confusing if you know what it is explaining. The graphs should not be changed let tradition run its course. It has been successful and if we changed the graphs then people would become more confused. Every graph would need some type of rule. I say that it has been working for years let it be.
ReplyDeleteJessica McCoy eco2020 saturday
Someone stated in the saturday class of econ 2020 that when you start over analyzing economics, that's when it starts to confuse you. This applies to me especially since I have no background in ecnomic studies. I am more of a liberal arts person and love analyzing human behavior. Economics is more objective and I believe is better understood with a fair background in calculus. I honestly never even noticed a drastic change between the economic supply and demand curve compared to the traditional dependant variable on y axis and independant variable on x axis. Furthermore, I don't really consider price to be the independant variable, I believe both price and quantity are interdependant. I also believe anyone with common sense would look at the graph and say (for example) "ok the higher the price the less quantity demanded" just by looking at the demand curve in relation to the variables listed on each axis. When trying to imagine the quantity demanded or supplied on the y axis instead of the x axis, I just start confusing myself. This not only validates the phrase "why fix it if it "ain't" broke?" but it also validates another "why try to fix something that isn't broken and ultimatly will get you out of your comfort zone and confuse you?" Now I've really conused myself.
ReplyDeleteI believe there should be no change. Leaving things the way they are is better because it is tradition and everyone is familiar with it. Changing it will make it more confusing to people, and that means everyone would have to learn the new dependent and independent variable. Also, it's not like the graph is not hard to understand, it is very easy, so why change it? Sometimes it's just best to leave things unchanged.
ReplyDeleteTraditionally the supply and demand curve have been used because of Adam Smith. His invisible hand is the reason behind the way of plotting the graph. He states that markets have means outside of government control the normalize price and what companies will produce. His work is often used as an example to why we have government regulation. If Adam is stated as simply that peopl wont buy stuff that is too expensive it works. If he is used to talk about and apply to government regulations it is false. The demand curve is a good way to show demand. It however has several week points that it can not show. Such things like brand loyalty, inferior alternative products and advertising. Things like these can not be simply shown. The demand curve is good for what it is. It is a simple way to show what people want. It can't be taken for anything more.
ReplyDeleteAt first glance I was confused by the supply and demand graph because it presents so much information at once. I believe the average person would be confused too because the x-axis and y-axis have several different meanings and representations. However, now that I am studying economics it is much easier to read and understand. Maybe in the future mathematicians and economists could create a more efficient reading supply and demand model that is less confusing to the average person. For now though the traditional model is working just fine and I believe it should stay.
ReplyDeleteECO 2020 Student, Timothy Hooker (4:30pm T/TR class)
At first I was confused by this because its not the same as other graphs we look at. After looking at so many of these graphs we were able to see it enough to make sense. Maybe economists make the supply and demand graphs like this so they can be different or stand out from the crowd.
ReplyDeleteTo change the Qwerty now would be useless... The way that the graphs are plotted are not important to the information contained within. To change the look now would have no effect, except to make going back and tracking former graphs confusing. I say stick with tradition and continue to create these graphs in this way... no reason to make a change now.
ReplyDeleteT. Wiseman ECO-2020 Sat.
Swanmika Reed (dy9476) ECO 2020-006 says...
ReplyDeleteThe graph is okay just the way it is, even if the axis were to be changed the graph will look exactly the same, equilibrium quantity and price will remain the same. People just need to know how to interpret the graph themselves. As price goes up, demand goes down. As price goes up, the quantity suppliers are willing to supply goes up. Inverse relationship with demand, and a direct relationship with supply...
I think this graph should stay this way because when the demand and supply curve both intersect it is clearly shown as the equilibrium. Also it gives a clear view of the law of demand which states that as the price goes up demand goes down and that they are negatively related.
ReplyDelete