Non-Linear Functions

Often in economics a linear function cannot explain the relationship between

variables. In such cases a non-linear function must be used. Non-linear means the
graph is not a straight line. The graph of a non-linear function is a curved line. A curved
line is a line whose direction constantly changes.

A cautionary note: Economists are accustomed to designate all lines in graphs as curves
- both straight lines and lines which are actually curved.

Although the slope of a linear function is the same no matter where on the line it is
measured, the slope of a non-linear function is different at each point on the line. Thus
there is no single slope for a non-linear function. However the slope can be determined at
any point on the line. The techniques of differential calculus are used to determine the
slopes of non-linear functions.

Three non-linear functions commonly used in economics are

the exponential function

the quadratic function
the logarithmic function

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