1. Graphs represent one form of representing information visually and can, as we saw in the Cholera and Challenger examples, be very effective at conveying information to the reader. You job is to track down some graphs that will become part of your portfolio of the Best and Worst Graphics. At this point you need to track down one graph, from outside of economics, that you would like nominated for both categories. You also need a brief memo in which you indicate why you chose these graphs.

2. There has been much written about discrimination against women. The earnings data for males and females clearly indicates the following patterns. You are to determine the appropriate variables and then draw a graph that captures the essence of each of the statements.

a. Women and men receive comparable starting salaries, but women receive smaller yearly increases as they get older.

b. The age-premium for women is higher for single nurses than for married nurses.

c. The age-premium for college educated men is higher than the age-premium for high school educated women.

3. Population biologists often discuss the concept of survivorship. For populations information on survivorship is summarized in survivorship schedules which give the percentage of individuals surviving to each particular age. These tables, an example of which appears below, can be conveniently represented in graphs.

From the following descriptions, produce the appropriate survivorship graph. [Be sure you have the correct axes - survivorship probabilities and age]

Species A: Accidental mortality is kept to a minimum. Death comes to most members only when they reach the upper limit of the life span.

Species B: The probability of death remains constant at every age. A fixed fraction of each age group dies (due to predators, accidents,..) in each unit of time.

Species C: The vast majority perish quickly. Those individuals that do survive have a good chance of reaching maturity.

4. Draw a graph that best describes the verbal descriptions of the following relationships.

a. Tax revenue (T) increases as we raise the income tax rate (t) from $0 up to a certain rate t* at which any further increase in the tax rate will result in lower tax revenues.

b. GNP for a twenty year period where the growth rate has remained constant throughout the period.

c. The relationship between the number of calories burned per minute (C) of running and age (A) if there is a decrease of 2 calories burned per minute with each year we age.

d. China's military power is currently less than the US but it is projected to grow at a faster rate than the US and some suggest that there will be a time in the 21st Century when China's military power will be greater than that of the US.

5. I recently listened to two forecasts of sales for a large high-tech company. The first forecast was for continued sales growth of $5 million a year for the next ten years. The second was a forecast for 20% per year for the next ten years. The current level of sales is $25 million. Draw a graph of the sales for the next ten years based on the two forecasts (one graph).

6. So you want to create some graphs! The good news is that there are already some spreadsheets available electronically. You could use the data sets which I have created, or you could go out and track down some other tables on the Web-maybe using some of the locations identified on the Data Sources page. You are to construct one Pie, Bar, Stack, Area, Scatter, and Line graph which will be part of your portfolio for the course. As you develop your graphs, be sure that you choose data so that the graph which you choose is the best graph for that data.

7a. You have heard much about the plight of the American worker, how the average earnings for workers in this country are falling. But what is the story? Do you buy into the story after you see the graph below. It is pretty clear that average wages have been rising since the end of WWII.

7b. It is not difficult to understand the basis for the fear of the federal budget deficit that swept across the country in 1996. It is clear from the diagram below that the budget deficit has grown to historically unprecedented levels in recent years and that if it is not reversed, the young people of today will be burdened with an enormous debt in the future. Are you on the deficit reduction bandwagon?

7c. The 1980s was a boom-bust period for real estate in the US-especially in the Northeast. One of the explanations advanced for the speculative boom in the early 1980s was that banks had been burned by foreign loans to developing countries in the early 1980s and as a result turned their attention to real estate in the US and flooded the market with money. The problem facing the developing countries was that they were incapable of paying loans at the high rates that existed in the early to mid 1980s. My concern is that I can see that interest rates actually fell during this period as you can see in the diagram below. So where is the problem?

7d. It is difficult not to notice what is happening in the stock market as it roars into uncharted territory. Things are so good in fact that some financial people are concerned we are reliving the 1920s and setting ourselves up for another stock market crash. Are we, or are we simply seeing a continuation of a rise that began as far back as the 1950s? What's the verdict given the past performance of the New York Sock Exchange Composite Index?

8. It is now time to test your skills at using graphs to help you tell a story. You are to construct at least one graph that will allow you to tell me a story about different aspects of the capital market in the US. More specifically, I am interested in some graphs that will allow you explain the following.

a. The relationship between the maturity effect and inflation. [the maturity effect is the difference between a long-term and a short-term interest rate]

b. The relationship between inflation and the performance of the stock market.

c. The relationship between the federal budget deficit and the trade deficit.

d. The relationship between real interest rates and inflation.