1 of 23 Introduction Introduction to the lecture format and a Review of some graphing principles Right mouse click to advance, or Use the arrow keys to navigate in the presentation : the up or right arrow to advance, the down or left arrow to go back; The image of the house appears on every slide in the upper left and operates as a hyper link to the slide “Lecture Outline” Tips for Navigation in the presentation:

2 of 23 Lecture Outline First slide Introduction to the lecture format Review of Graphing Slopes of Straight Lines Four Benchmarks of Straight Lines & Slopes Distance Traveled & Time Slope and Marginal Analysis Shifting the line Curved Lines Curved Lines (Micro Class Only) To advance through the presentation you can mouse click to the next slide, or click any of the above hyperlinks.

3 of 23 Three Delivery Formats TRADITIONAL face to face lecturesONLINE lectures anytime, anywhere BLENDED: Online Lectures TA led face to face discussion section

What we strive to achieve… Be Prepared Endeavor Participate Respect Others

5 of 23 Data: Age, Education, and Pay Outline Ch 12 Age Earning Profiles By Level of Education A College Degree leads to a dramatically higher earnings level than a high school graduate

6 of 23 Does Education Pay off? Tara Kalwarski, Business Week Sept September Tara Kalwarski, Business Week Sept September, writes: Going to school pays off, and earnings for U.S. adults with college degrees have held up well during the downturn. That might explain why more people are getting higher degrees than ever before. Nevertheless, a surprisingly large number of Americans lack even a high school diploma.

7 of 23 Course Goal Skill of explaining economic concepts on the back of a drink coaster Try explaining the benefit of education by contrasting the age earning profiles of individuals with the highest educational attainment of a BA and a high school diploma. The next slide shows an example.

8 of 23 Age-earnings Profile by education on a napkin The graph above contrasts the outcomes Click here for the Graphing review, orhere Click here to return to the lecture outlinehere

9 of 23 Review of Graphing A quick review of graphing basis we have the following 3 slides: 1. What is a graph 2. Basics of a graph 3. Example of a Graph Click the topic to begin the review of the next 3 slides (it is hyperlinked), or Click here to skip ahead to the next topic: SlopeSlope

10 of 23 What is a graph? It is a picture showing how two variables relate It conveys information in a compact and efficient way It shows the functional or casual relation that exists between two variables when the value of one variable depends on another It shows how the value of the dependent variable on the vertical axis depends on the value of the independent variable on the horizontal axis Click here to return to menu of review of graphinghere

11 of 23 Basics of a Graph The value of variable x, measured along the horizontal axis, increases as you move to the right of the origin. The value of the variable y, measured along the vertical axis, increases as you move upward. Any point on a graph represents a combination of particular values of two variables. For example, point a represents the combination of 5 units of variable x and 15 units of variable y, while point b represents 10 units of x and 5 units of y. Click here to return to menu of review of graphinghere

Hours Distance Driven Traveled Per Per Day Day (miles) (x) (y) a1 50 b2100 c3150 d4200 e5250 Example: Relating Distance Traveled to Hours Driven The data in the left side table is plotted in the graph on the right. Click here to return to menu of review of graphinghere

13 of 23 Slopes of Straight Lines The Slope indicates: how much the vertical variable changes for a given change in the horizontal variable The formula for Slope is: Change in the vertical distance / change in the horizontal distance, or expressed more commonly as rise over run Slope of straight line is the same everywhere along the line

14 of 23 Four Benchmark Examples Four benchmark examples: Positive slope Negative slope Horizontal Vertical To view each example, click the example (they are hyperlinked to the corresponding slide), or Click here to advance to the next topic: “Slope and Marginal Analysis”here

Slopes for Straight Lines: Positive 8a.) Positive relation Click here to return to menu of slope exampleshere

Slopes for Straight Lines: Negative 8b.) Negative relation Click here to return to menu of slope exampleshere

Slopes for Straight Lines: Zero 8c.) No relation: zero slope Click here to return to menu of slope exampleshere

Slopes for Straight Lines: Infinite 8d.) No relation: infinite slope Click here to return to menu of slope exampleshere

19 of 23 Slope and Marginal Analysis Economic analysis usually involves marginal analysis The slope is a convenient device for measuring marginal effects because it reflects the change in one variable – the cause -- compared to the change in some other variable – the effect Click here to return to menu of slope exampleshere

Hours driven per day D i s t a n c e t r a v e l e d p e r d a y ( m i l e s ) d T f T' An increase in average speed (from point f) increases the distance traveled for every hour driven (to point h). Shift in Curve Relating Distance Traveled to Hours Driven h Or to say the same thing in other words: An increase in average speed (from point f) reduces the numbers of hours to drive the same distance (to point d).

21 of 23 Curved Lines (Micro class only) Indifference Curves For analysis of consumer behavior Revenue and Cost Curves For analysis of firm behavior Click a topic, or click here to continue to the end of the presentationhere

y x b B B a A A Slope of curved line varies at different points along curve Draw a straight line that just touches the curve at a point but does not cut or cross the curve – tangent to the curve at that point Slope of the tangent at that point is the slope of the curve at that point With line AA tangent to the curve at point a, the horizontal value increases from 0 to 10 while the vertical value falls from 40 to 0  therefore the slope of the tangent at point “a” is “-4” MICRO Class Only Slopes at Different Points on a Curved Line

y x b a The hill- shaped curve begins with a positive slope to the left of point a, a slope of 0 at point a, and a negative slope to the right of point a. The U-shaped curve begins with a negative slope, has a slope of 0 at point b, and a positive slope after point b. MICRO Class Only Curves with Both Positive and Negative Ranges

END OF PRESENTATION