<< Chapter < Page Chapter >> Page >

[link] shows a recent graduate’s credit card balance each month after graduation.

Month 1 2 3 4 5 6 7 8
Debt ($) 620.00 761.88 899.80 1039.93 1270.63 1589.04 1851.31 2154.92
  1. Use exponential regression to fit a model to these data.
  2. If spending continues at this rate, what will the graduate’s credit card debt be one year after graduating?
  1. The exponential regression model that fits these data is y = 522.88585984 ( 1.19645256 ) x .
  2. If spending continues at this rate, the graduate’s credit card debt will be $4,499.38 after one year.
Got questions? Get instant answers now!

Is it reasonable to assume that an exponential regression model will represent a situation indefinitely?

No. Remember that models are formed by real-world data gathered for regression. It is usually reasonable to make estimates within the interval of original observation (interpolation). However, when a model is used to make predictions, it is important to use reasoning skills to determine whether the model makes sense for inputs far beyond the original observation interval (extrapolation).

Building a logarithmic model from data

Just as with exponential functions, there are many real-world applications for logarithmic functions: intensity of sound, pH levels of solutions, yields of chemical reactions, production of goods, and growth of infants. As with exponential models, data modeled by logarithmic functions are either always increasing or always decreasing as time moves forward. Again, it is the way they increase or decrease that helps us determine whether a logarithmic model is best.

Recall that logarithmic functions increase or decrease rapidly at first, but then steadily slow as time moves on. By reflecting on the characteristics we’ve already learned about this function, we can better analyze real world situations that reflect this type of growth or decay. When performing logarithmic regression analysis , we use the form of the logarithmic function most commonly used on graphing utilities, y = a + b ln ( x ) . For this function

  • All input values, x , must be greater than zero.
  • The point ( 1 , a ) is on the graph of the model.
  • If b > 0 , the model is increasing. Growth increases rapidly at first and then steadily slows over time.
  • If b < 0 , the model is decreasing. Decay occurs rapidly at first and then steadily slows over time.

Logarithmic regression

Logarithmic regression is used to model situations where growth or decay accelerates rapidly at first and then slows over time. We use the command “LnReg” on a graphing utility to fit a logarithmic function to a set of data points. This returns an equation of the form,

y = a + b ln ( x )

Note that

  • all input values, x , must be non-negative.
  • when b > 0 , the model is increasing.
  • when b < 0 , the model is decreasing.

Given a set of data, perform logarithmic regression using a graphing utility.

  1. Use the STAT then EDIT menu to enter given data.
    1. Clear any existing data from the lists.
    2. List the input values in the L1 column.
    3. List the output values in the L2 column.
  2. Graph and observe a scatter plot of the data using the STATPLOT feature.
    1. Use ZOOM [9] to adjust axes to fit the data.
    2. Verify the data follow a logarithmic pattern.
  3. Find the equation that models the data.
    1. Select “LnReg” from the STAT then CALC menu.
    2. Use the values returned for a and b to record the model, y = a + b ln ( x ) .
  4. Graph the model in the same window as the scatterplot to verify it is a good fit for the data.

Questions & Answers

Ayele, K., 2003. Introductory Economics, 3rd ed., Addis Ababa.
Widad Reply
can you send the book attached ?
Ariel
?
Ariel
What is economics
Widad Reply
the study of how humans make choices under conditions of scarcity
AI-Robot
U(x,y) = (x×y)1/2 find mu of x for y
Desalegn Reply
U(x,y) = (x×y)1/2 find mu of x for y
Desalegn
what is ecnomics
Jan Reply
this is the study of how the society manages it's scarce resources
Belonwu
what is macroeconomic
John Reply
macroeconomic is the branch of economics which studies actions, scale, activities and behaviour of the aggregate economy as a whole.
husaini
etc
husaini
difference between firm and industry
husaini Reply
what's the difference between a firm and an industry
Abdul
firm is the unit which transform inputs to output where as industry contain combination of firms with similar production 😅😅
Abdulraufu
Suppose the demand function that a firm faces shifted from Qd  120 3P to Qd  90  3P and the supply function has shifted from QS  20  2P to QS 10  2P . a) Find the effect of this change on price and quantity. b) Which of the changes in demand and supply is higher?
Toofiq Reply
explain standard reason why economic is a science
innocent Reply
factors influencing supply
Petrus Reply
what is economic.
Milan Reply
scares means__________________ends resources. unlimited
Jan
economics is a science that studies human behaviour as a relationship b/w ends and scares means which have alternative uses
Jan
calculate the profit maximizing for demand and supply
Zarshad Reply
Why qualify 28 supplies
Milan
what are explicit costs
Nomsa Reply
out-of-pocket costs for a firm, for example, payments for wages and salaries, rent, or materials
AI-Robot
concepts of supply in microeconomics
David Reply
economic overview notes
Amahle Reply
identify a demand and a supply curve
Salome Reply
i don't know
Parul
there's a difference
Aryan
Demand curve shows that how supply and others conditions affect on demand of a particular thing and what percent demand increase whith increase of supply of goods
Israr
Hi Sir please how do u calculate Cross elastic demand and income elastic demand?
Abari
Got questions? Join the online conversation and get instant answers!
Jobilize.com Reply

Get Jobilize Job Search Mobile App in your pocket Now!

Get it on Google Play Download on the App Store Now




Source:  OpenStax, Algebra and trigonometry. OpenStax CNX. Nov 14, 2016 Download for free at https://legacy.cnx.org/content/col11758/1.6
Google Play and the Google Play logo are trademarks of Google Inc.

Notification Switch

Would you like to follow the 'Algebra and trigonometry' conversation and receive update notifications?

Ask