Chapter 1 Appendix Graphs and Their Meaning Copyright

Construction of a Graph • A visual representation of the relationship between two variables

Direct and Inverse Relationships • Direct relationship • Both variables move in the same

Construction of a Graph Direct Relationship Graph Table Point $ 0 $ 50 a

Direct and Inverse Relationships Continued • Inverse relationship • Variables move in opposite directions

Construction of a Graph Indirect Relationship Table Attendance, Thousands $ 50 0 a 40

Slope of a Line • Slopes and measurement units • Slopes and marginal analysis

Positive Slope of a Line Slope = 1 vertical change +50 = = =

Negative Slope of a Line vertical change -10 = horizontal change +4 Slope =

Slope = infinite Purchases of watches LO 8 Consumption Price of Bananas Slope of

Equation of a Linear Relationship • y = a + bx, where • y

Equation of a Line Y = 50 +. 5 C Consumption (C) $400 300

Equation of a Line Continued P = 50 – 2. 5 Q 50 Ticket

Slope of a Nonlinear Curve • Slope always changes • Use a line tangent

Slope of a Nonlinear Curve Continued 20 15 10 5 0 LO 8 5

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Construction of a Graph • A visual representation of the relationship between two variables • Horizontal axis • Vertical axis • Independent variable • Dependent variable • Ceteris paribus LO 8 Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-2 1 -2

Direct and Inverse Relationships • Direct relationship • Both variables move in the same direction LO 8 Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-3 1 -3

Construction of a Graph Direct Relationship Graph Table Point $ 0 $ 50 a 100 b 200 150 c 300 400 250 d e $400 Consumption (C) Income Consumption 300 e 200 d c 100 b a 0 LO 8 $100 200 300 Income (Y) 400 Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-4 1 -4

Direct and Inverse Relationships Continued • Inverse relationship • Variables move in opposite directions LO 8 Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-5 1 -5

Construction of a Graph Indirect Relationship Table Attendance, Thousands $ 50 0 a 40 4 b 30 8 c LO 8 12 Point d 10 16 e 0 20 f $ 50 b 40 Ticket price (P) Ticket Price 20 Graph a c 30 d 20 e 10 f 0 4 8 12 16 Attendance in thousands (Q) 20 Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-6 1 -6

Slope of a Line • Slopes and measurement units • Slopes and marginal analysis • Infinite and zero slopes • Vertical intercept LO 8 Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-7 1 -7

Positive Slope of a Line Slope = 1 vertical change +50 = = = 0. 5 horizontal change +100 2 Consumption (C) $400 300 200 100 0 LO 8 50 Vertical change 100 Horizontal change Income (Y) Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-8 1 -8

Negative Slope of a Line vertical change -10 = horizontal change +4 Slope = = -2 1 2 = -2. 5 50 Ticket Price $ 40 30 Vertical -10 change 20 10 4 Horizontal change 4 LO 8 8 12 16 20 Attendance Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-9 1 -9

Slope = infinite Purchases of watches LO 8 Consumption Price of Bananas Slope of a Line Continued Slope = zero Divorce rate Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-10 1 -10

Equation of a Linear Relationship • y = a + bx, where • y is the dependent variable • a is the vertical intercept • b is the slope of the line • x is the independent variable LO 8 Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-11 1 -11

Equation of a Line Y = 50 +. 5 C Consumption (C) $400 300 200 100 0 $100 LO 8 200 300 Income (Y) 400 Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-12 1 -12

Equation of a Line Continued P = 50 – 2. 5 Q 50 Ticket price 40 30 20 10 4 LO 8 8 12 16 20 Attendance Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-13 1 -13

Slope of a Nonlinear Curve • Slope always changes • Use a line tangent to the curve to find slope at that point LO 8 Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-14 1 -14

Slope of a Nonlinear Curve Continued 20 15 10 5 0 LO 8 5 10 15 20 Copyright © 2018 Mc. Graw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Mc. Graw-Hill Education. 1 A-15 1 -15