... percentage terms, not dollars. When you read about unions negotiating with companies, you hear reports of, say, a 5% increase, not a $500 increase. Putting data on a log scale emphasizes relative differences (or percentage change) rather than absolute differences.
When describing the value of money, economists often use an important concept known as utility. Is every dollar that you earn as important as every other dollar? To most of us, earning another $1,000 a year has a lot of “utility.” The extra money means that we can afford to do and buy more than we would otherwise. But does the extra money affect us all in the same way? Would another $1,000 ...
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