GRAPHS AND

THEIR MEANING
APPENDIX
1A - 1 Copyright McGraw-Hill/Irwin, 2005
INCOME
(per week)
$ 0
100
200
300
400
$ 50
100
150
200
250
CONSUMPTION
(per week)
Table of Values
Construction of a Graph
1A - 2
BACK TERMS
Copyright McGraw-Hill/Irwin, 2005
INCOME
(per week)
$ 0
100
200
300
400
$ 50
100
150
200
250
CONSUMPTION
(per week)
Table of Values
Construction of a Graph
1A - 3
BACK TERMS
C
O
N
S
U
M
P
T
I
O
N

(
C
)

$400



300



200



100
Vertical Axis
Copyright McGraw-Hill/Irwin, 2005
INCOME
(per week)
$ 0
100
200
300
400
$ 50
100
150
200
250
CONSUMPTION
(per week)
Table of Values
Construction of a Graph
1A - 4
BACK TERMS
C
O
N
S
U
M
P
T
I
O
N

(
C
)

0 100 200 300 400
INCOME (Y)
$400



300



200



100
Vertical Axis
Horizontal Axis
Copyright McGraw-Hill/Irwin, 2005
INCOME
(per week)
$ 0
100
200
300
400
$ 50
100
150
200
250
CONSUMPTION
(per week)
Exists Between Consumption & Income
C
O
N
S
U
M
P
T
I
O
N

(
C
)

0 100 200 300 400
INCOME (Y)
$400



300



200



100
a
b
c
d
e
a
b
c
d
e
C=50+.5Y
A Direct Relationship...
1A - 5
BACK TERMS
Copyright McGraw-Hill/Irwin, 2005
TICKET
PRICE
$ 50
40
30
20
10
0
0
4
8
12
16
20
ATTENDANCE
(thousands)
An Inverse Relationship...
Exists Between Ticket Prices & Attendance
T
I
C
K
E
T

P
R
I
C
E

(
P
)

0 4 8 12 16 20
ATTENDANCE IN THOUSANDS (Q)
$50


40


30


20


10
a
b
c
d
e
a
b
c
f
e
P=50-2.5Q
f
d
1A - 6
BACK TERMS
Copyright McGraw-Hill/Irwin, Inc. 2005
Can you locate the
Dependent and
Independent Variables?
Variable Dependency
1A - 7
BACK TERMS
Copyright McGraw-Hill/Irwin, 2005
Slope of the Line is...
Vertical Change
Horizontal Change
50
100
= .5
1A - 8
BACK TERMS
INCOME
(per week)
$ 0
100
200
300
400
$ 50
100
150
200
250
CONSUMPTION
(per week)
C
O
N
S
U
M
P
T
I
O
N

(
C
)

0 100 200 300 400
INCOME (Y)
$400



300



200



100
Positive Slope
Copyright McGraw-Hill/Irwin, 2005
Slope of the Line is...
Vertical Change
Horizontal Change
-10
+4
= -2.5
1A - 9
BACK TERMS
Negative Slope
TICKET
PRICE
$ 50
40
30
20
10
0
0
4
8
12
16
20
ATTENDANCE
(thousands)
T
I
C
K
E
T

P
R
I
C
E

(
P
)

0 4 8 12 16 20
ATTENDANCE IN THOUSANDS (Q)
$50


40


30


20


10
Copyright McGraw-Hill/Irwin, 2005
MEASUREMENT UNITS
MARGINAL ANALYSIS
INFINITE & ZERO SLOPES
Slope of a Line
1A - 10
BACK TERMS
P
r
i
c
e

o
f

B
a
n
a
n
a
s

Purchases of Watches
C
o
n
s
u
m
p
t
i
o
n

Divorce Rate
Slope =
Infinite
Slope = Zero
Copyright McGraw-Hill/Irwin, 2005
I n Equation Form
C = 50 + .5Y
P = 50 - 2.5 Q
Slope of a Line
1A - 11
BACK TERMS
y = a + bX
Copyright McGraw-Hill/Irwin, 2005
Slope of a Nonlinear Curve...
The Slope of a Straight Line
Drawn J ust Tangent to the Curve
B
b
b
Q
P
20

15

10

5

0
5 10 15 20
A
a
a
1A - 12
BACK TERMS
Copyright McGraw-Hill/Irwin, 2005
Vertical & Horizontal Axes?
1A - 13
BACK TERMS
Can You Identify...
Copyright McGraw-Hill/Irwin, 2005
Vertical Intercept?
1A - 14
BACK TERMS
Can You Identify...
Copyright McGraw-Hill/Irwin, 2005
Slope of the Line?
1A - 15
BACK TERMS
Can You Identify...
Copyright McGraw-Hill/Irwin, 2005
Tangent?
1A - 16
BACK TERMS
Can You Identify...
Copyright McGraw-Hill/Irwin, 2005
Direct & Inverse
Relationships?
1A - 17
BACK TERMS
Can You Identify...
Copyright McGraw-Hill/Irwin, 2005
horizontal axis
vertical axis
direct relationship
inverse relationship
independent variable
dependent variable
slope of a straight line
vertical intercept
END SHOW
Copyright McGraw-Hill/Irwin, 2005
THE
ECONOMIZING
PROBLEM
CHAPTER 2
COMING SOON
Copyright McGraw-Hill/Irwin, 2005