Economists often use graphs to advance an argument about how the economy works. In other words, they use graphs to argue about how one set of events causes another set of events. With a graphs like the demand curve, there is no doubt cause and effect. Because we are varying price and holding all other variables constant, we know that change in the price of novels cause change in the quantity Emma demands. Remember however that our demand curve came from a hypothetical example. When graphing data from the real world it is often more difficult to establish how one variable affects another. The first problem is that it is difficult to hold everything else constant when measuring how one variable affects another. If we are not able to hold variables constant, we might decide that one variable on our graph is causing changes in the other variable when actually those change are caused by a third omitted variable not pictured on the graph. Even if we have identified the ...