Chapter 1W: Web Appendix: Graphs and Their Meaning

Web AppendixChapter 1WWeb Appendix: Graphs and Their MeaningCopyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinConstruction of a GraphLO7TableGraphIncomeConsumptionPoint$ 0100200300400$ 50 100 150 200 250abcdeConsumption (C)Income (Y) $100 200 300 400abcde$400 300 200 100 0App 1-*Direct and Inverse RelationshipsLO7 Direct relationshipBoth variables move up or down togetherConsumption (C)Income (Y)App 1-*Direct and Inverse Relationships Inverse relationshipVariables move opposite of each otherLO7Ticket Price (P)Attendance in Thousands (Q)App 1-*Dependent and Independent VariablesIndependent variable—the variable causing a change in some other (dependent) variableAlso called the causal variableDependent variable—the variable that changes as a result of a change in some other (independent) variableAlso called the outcome variableLO7App 1-*Slope of a LineLO7 Positive slope of a straight lineSlope =Vertical changeHorizontal change+50+100= 0.5==12App 1-*Slope of a Line Negative slope of a straight lineLO7Slope =Vertical changeHorizontal change=-10+4=12-2=-2.5App 1-*LO7Slope of a LineSlopes and measurement unitsSlopes and marginal analysisInfinite and zero slopesApp 1-*LO7Slope of a LinePrice of BananasConsumptionPurchases of WatchesDivorce RateSlope = InfiniteSlope = ZeroApp 1-*LO7Slope of a Nonlinear CurveSlope always changesMust use a line tangent to the curve to find slope at that pointApp 1-*Slope of a Nonlinear CurveLO7201510 5 05 10 15 20 Use tangent lines to find the slopeApp 1-*