1. 01 Appendix Limits, Alternatives, and Choices
Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin

2. Construction of a Graph
Table
Income
Consumption
Point
$ 0
100
200
300
400
$ 50
100
150
200
250 a b c d e
$400
300
200
100
Consumption (C) e d c b a $
Income (Y)
LO7
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3. Direct and Inverse Relationships
Direct relationship
Both variables move up or down together
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4. Direct and Inverse Relationships
Variables move opposite of each other
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5. Positive slope of a straight line
Slope of a Line
Positive slope of a straight line
Vertical Change
+50 1 2
Slope = = =
= 0.5
Horizontal Change
+100
$400
300
200
100
Consumption (C) 50
Vertical
Change
100
Horizontal Change $
Income (Y)
LO7
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6. Attendance (thousands)
Slope of a Line
Ticket Price
Attendance (thousands)
$50 40 4 30 8 20 12 10 16
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7. Negative slope of a straight line
Slope of a Line
Negative slope of a straight line
Vertical Change
-10 1 2
Slope = = -2
-2.5 = = 50
4030 20 10
Horizontal Change +4
Ticket Price $
Vertical
Change
-10 4
Horizontal Change
Attendance
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8. Slopes and measurement units Slopes and marginal analysis
Slope of a Line
Slopes and measurement units
Slopes and marginal analysis
Infinite and zero slopes
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9. Slope of a Line Slope = Zero Slope = Infinite Price of Bananas
Consumption
Watch Purchases
Divorce Rate
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10. Equation of a Linear Relationship
y = a + bx
y is the dependent variable
a is the vertical intercept
b is the slope of the line
x is the independent variable
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11. Equation of a Line Y = 50 + .5C $400 300 Consumption (C) 200 100
Consumption (C) $
Income (Y)
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12. Equation of a Line
P = 50 – 2.5Q 50
4030 20 10
Ticket Price
Attendance
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13. Slope of a Nonlinear Curve
Slope always changes
Must use a line tangent to the curve to find the slope at that point
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14. Slope of a Nonlinear Curve
Use tangent lines to find the slope 20 15 10 5
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