Chapter 1A. Graphs and Their Meaning

Chapter 1AGraphs and Their MeaningCopyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Construction of a GraphGraphA visual representation of the relationship between two variablesHorizontal axisVertical axisIndependent variableDependent variableCeteris paribusLO8Direct and Inverse RelationshipsDirect relationshipBoth variables move in the same directionLO8Direct and Inverse RelationshipsInverse relationshipVariables move in opposite directionsLO8Slope of a LineSlopeSlopes and measurement unitsSlopes and marginal analysisInfinite and zero slopesVertical interceptLO8Positive Slope of a LineSlope =vertical changehorizontal change+50+100= 0.5==12LO8Consumption (C)Income (Y)$400 300 200 100 050100VerticalchangeHorizontal changeNegative Slope of a LineSlope =vertical changehorizontal change=-10+4=12-2=-2.55040302010 4 8 12 16 20-104Horizontal changeVerticalchangeTicket Price $AttendanceLO8Slope of a LinePrice of BananasConsumptionPurchases of watchesDivorce rateSlope = infiniteSlope = zeroLO8Equation of a Linear Relationshipy = a + bx, wherey is the dependent variablea is the vertical interceptb is the slope of the linex is the independent variableLO8Equation of a LineConsumption (C)Income (Y) $100 200 300 400$400 300 200 100 0Y = 50 + .5CLO8Slope of a Nonlinear CurveSlope always changesUse a line tangent to the curve to find slope at that pointLO8Slope of a Nonlinear Curve201510 5 05 10 15 20LO8