2 Appendix 1A Practice Quiz Tutorial Applying Graphs to Economics ©2000 South-Western College Publishing

3 1. Straight line CD in Exhibit 1A-5 on the next page shows that a. increasing the value of X will increase the value of Y. b. decreasing the value of X will decrease the value of Y. c. there is a direct relationship between X and Y. d. all of the above. D. As the value of X increases, the value of Y increases, and vice versa; this is called a direct relationship.

D EXHIBIT 1A-5 X Y C

5 2. In Exhibit 1A-5, the slope of straight line CD is a. 3. b. 1. c. -1. d. 1/2. D. The slope of a line is measured by the rise over the run, or a change in vertical divided by a change in the horizontal. For example, as Y increases from 5 units to 15, X increases from 0 to 20. The slope is 10 divided by 20.

6 3. In Exhibit 1A-5, the slope of straight line CD is a. positive. b. zero. c. negative. d. variable. A. When both X and Y move in the same direction, it is said that they are directly related to one another.

7 4. Straight line AB in Exhibit 1A-6 shows that a. increasing the value of X reduces the value of Y. b. decreasing the value of X increases the value of Y. c. there is an inverse relationship between X and Y. d. all of the above are true. D. When the value of X decreases, the value of Y increases and vice versa; this shows a direct relationship between X and Y.

A B EXHIBIT 1A-6 X Y

9 5. As shown in Exhibit 1A-6, the slope of straight line AB a. decreases with increases in X. b. increases with increases in X. c. increases with decreases in X. d. remains constant with changes in X. D. The slope of a straight line stays the same between the two points on the line.

10 6. In Exhibit 1A-6, the slope of straight line AB is a. 3. b. 1. c. -1. d. -5. C. There is a one to one inverse ratio between a change in X and a change in Y. For example, as Y decreases from 20 units to 0, X increases from 0 to 20. The slope is -20 divided by 20.

11 7. A shift is a curve represents a change in a. the variable on the horizontal axis. b. the variable on the vertical axis. c. a third variable that is not on either axis. d. any variable that is relevant to the relationship being graphed. C. A shift occurs when something changes other than the price.

12 8. A change in a third variable not on either axis of a graph is illustrated by a a. horizontal or vertical line. b. movement along a curve. c. shift of a curve. d. point of intersection. C. When price changes the movement is always along a stationary curve. When something changes other than price, the whole curve shifts.

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