Because vector graphic images
are made of mathematical descriptions of curves, lines, and shapes they are easily scalable. In other words they can be expanded or compressed across an almost infinite range of sizes without distortion. (See
this Wikipedia article for a full explanation of how this works.) Raster graphics such as jpegs are scalable across only a very limited range without becoming really ugly. (See
this Wikipedia article for more information on raster images.)
While PDFs are vector graphics, raster images can either be encoded or embedded in a PDF document. Rather than go into a long dissertation on PDFs here take a look at
this Wikipedia article.
