Question

Decide whether the following statement makes sense (or is clearly true) or does not make sense (or is clearly false). Explain your reasoning. There's been only a very slight rise in our stock price over the past few months, but I wanted to make it look dramatic so I started the vertical scale from the lowest price rather than from zero. Choose the correct answer below.

A. The statement makes sense because reducing the range of the vertical axis to just fit the data will increase the relative size of the variation in the data.
B. The statement does not make sense because reducing the range of the vertical axis to just fit the data will decrease the relative size of the variation in the data.
C. The statement does not make sense because changing the axis cannot change the data that is being displayed.
D. The statement makes sense because increasing the range of the vertical axis to contain all of the data will increase the relative size of the variation in the data.

Answer 1

A. is the correct one. The statement makes sense.

Explanation:

A. This is true because if you make your graph starting from the lowest value then the graph will use more space to fit the data and it will make it look bigger. Also, the variation will seem higher because it will feel that you are increasing it from 0, so the relative increase will be higher.

B. Reducing the range of the vertical axis will increase the relative size of variation, not make it decrease, as we explained in A.

C. Even though it is technically certain that the data shown is the same as before, the way to show data also matters. And by making changes on the presentation of your data you can obtain different results on the impression that leaves to people.

D. This is just false, because you are indeed dereasing the range of the vertical axis, not increasing it.