GRAPHS AND THEIR MEANING CHAPTER 1 APPENDIX GRAPHS AND THEIR MEANING 1A - 1 Copyright McGraw-Hill/Irwin, 2005

Construction of a Graph Table of Values INCOME (per week) CONSUMPTION (per week) $ 0 100 200 300 400 $ 50 100 150 200 250 BACK TERMS 1A - 2 Copyright McGraw-Hill/Irwin, 2005

Construction of a Graph Table of Values INCOME (per week) CONSUMPTION (per week) Vertical Axis $400 300 200 100 $ 0 100 200 300 400 $ 50 100 150 200 250 CONSUMPTION (C) BACK TERMS 1A - 3 Copyright McGraw-Hill/Irwin, 2005

Construction of a Graph Table of Values INCOME (per week) CONSUMPTION (per week) Vertical Axis $400 300 200 100 $ 0 100 200 300 400 $ 50 100 150 200 250 CONSUMPTION (C) Horizontal Axis 0 100 200 300 400 INCOME (Y) BACK TERMS 1A - 4 Copyright McGraw-Hill/Irwin, 2005

Exists Between Consumption & Income A Direct Relationship... Exists Between Consumption & Income INCOME (per week) CONSUMPTION (per week) $400 300 200 100 C=50+.5Y $ 0 100 200 300 400 $ 50 100 150 200 250 a CONSUMPTION (C) b c d e c d e b a 0 100 200 300 400 INCOME (Y) BACK TERMS 1A - 5 Copyright McGraw-Hill/Irwin, 2005

An Inverse Relationship... Exists Between Ticket Prices & Attendance (thousands) P=50-2.5Q a $50 40 30 20 10 $ 50 40 30 20 10 4 8 12 16 20 a b b TICKET PRICE (P) c c d d e e f f 0 4 8 12 16 20 ATTENDANCE IN THOUSANDS (Q) BACK TERMS 1A - 6 Copyright McGraw-Hill/Irwin, Inc. 2005

Variable Dependency Can you locate the Dependent and Independent Variables? BACK TERMS 1A - 7 Copyright McGraw-Hill/Irwin, 2005

Slope of the Line is... Vertical Change Horizontal Change INCOME (per week) CONSUMPTION (per week) Positive Slope $400 300 200 100 $ 0 100 200 300 400 $ 50 100 150 200 250 50 100 = .5 CONSUMPTION (C) 0 100 200 300 400 INCOME (Y) BACK TERMS 1A - 8 Copyright McGraw-Hill/Irwin, 2005

Slope of the Line is... Vertical Change Horizontal Change TICKET PRICE ATTENDANCE (thousands) Negative Slope $50 40 30 20 10 $ 50 40 30 20 10 4 8 12 16 20 -10 +4 = -2.5 TICKET PRICE (P) 0 4 8 12 16 20 ATTENDANCE IN THOUSANDS (Q) BACK TERMS 1A - 9 Copyright McGraw-Hill/Irwin, 2005

Slope of a Line MEASUREMENT UNITS MARGINAL ANALYSIS INFINITE & ZERO SLOPES Price of Bananas Purchases of Watches Consumption Divorce Rate Slope = Zero Slope = Infinite BACK TERMS 1A - 10 Copyright McGraw-Hill/Irwin, 2005

Slope of a Line In Equation Form y = a + bX C = 50 + .5Y P = 50 - 2.5 Q BACK TERMS 1A - 11 Copyright McGraw-Hill/Irwin, 2005

Slope of a Nonlinear Curve... The Slope of a Straight Line Drawn Just Tangent to the Curve a Q P 20 15 10 5 5 10 15 20 A b B a b BACK TERMS 1A - 12 Copyright McGraw-Hill/Irwin, 2005

Can You Identify... Vertical & Horizontal Axes? BACK TERMS 1A - 13 Copyright McGraw-Hill/Irwin, 2005

Can You Identify... Vertical Intercept? BACK TERMS 1A - 14 Copyright McGraw-Hill/Irwin, 2005

Can You Identify... Slope of the Line? BACK TERMS 1A - 15 Copyright McGraw-Hill/Irwin, 2005

Can You Identify... Tangent? BACK TERMS 1A - 16 Copyright McGraw-Hill/Irwin, 2005

Can You Identify... Direct & Inverse Relationships? BACK TERMS 1A - 17 Copyright McGraw-Hill/Irwin, 2005

slope of a straight line Key Terms 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 THE ECONOMIZING PROBLEM COMING SOON Copyright McGraw-Hill/Irwin, 2005