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GRAPHS IN ECONOMICS

GRAPHS IN ECONOMICS. STUDY GUIDE. MULTIPLE CHOICE, #4-19 SHORT ANSWER, #2-8. A POSITIVE RELATIONSHIP. X Y 0 5 1 10 2 15 3 20 4 25 5 30 6 35 7 40 8 45 9 50 . A NEGATIVE RELATIONSHIP. X Y 0 20 1 18 2 16 3 14 4 12 5 10 6 8 7 6 8 4 9 2

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GRAPHS IN ECONOMICS

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  1. GRAPHS IN ECONOMICS

  2. STUDY GUIDE • MULTIPLE CHOICE, #4-19 • SHORT ANSWER, #2-8

  3. A POSITIVE RELATIONSHIP • X Y • 0 5 • 1 10 • 2 15 • 3 20 • 4 25 • 5 30 • 6 35 • 7 40 • 8 45 • 9 50

  4. A NEGATIVE RELATIONSHIP • X Y • 0 20 • 1 18 • 2 16 • 3 14 • 4 12 • 5 10 • 6 8 • 7 6 • 8 4 • 9 2 • 10 0

  5. SLOPE • CHANGE IN Y GIVEN A CHANGE IN X • How much one variable changes when another variable changes. • How much more people wish to sell as the price rises. • How much current consumption must fall to increase capital production

  6. SLOPE ON A STRAIGHT LINE • RISE OVER RUN • CHANGE IN Y: Y2-Y1 • DIVIDED BY • CHANGE IN X X2-X1

  7. X Y 1 10 2 15 3 20 4 25 5 30 6 35 7 40 8 45 9 50 10 55 Y2-Y1 15-10 = 5 X2-X1 2-1 = 1 5/1=5 THE SLOPE IS +5 POSITIVE RELATIONSHIPSTRAIGHT LINE

  8. X Y 0 20 1 18 2 16 3 14 4 12 5 10 6 8 7 6 8 4 9 2 10 0 Y2-Y1 12-14 = -2 X2-X1 4-3 = 1 -2/1 = -2 THE SLOPE IS -2 NEGATIVE RELATIONSHIPSTRAIGHT LINE

  9. SLOPE ON A CURVE • X Y • 0 16 • 1 11 • 2 8 • 3 7 • 4 8 • 5 11 • 6 16 • 7 23 • 8 32 • 9 43 • 10 56

  10. SLOPE ON A CURVE • First the curve has a negative slope, it reaches a minimum and then it has a positive slope. • At the minimum the slope is zero.

  11. SLOPE ACROSS AN ARC • CREATE A STRAIGHT LINE BETWEEN THE TWO POINTS OF THE ARC • CALCULATE SLOPE JUST AS FOR A STRAIGHT LINE

  12. SLOPE ACROSS AN ARC • Pt. 1 (20,8) • Pt. 2 (60,16) • Y2-Y1 • 16-8 = 8 • X2-X1 • 60-20 = 40 • 8/40 = .2 • THE SLOPE IS .2

  13. SLOPE ACROSS AN ARC • Pt. 2 (16, 0) • Pt. 1 (7, 30) • Y2-Y1 • 16-7 = 9 • X2-X1 • 0-30 = -30 • 9/-30 = • THE SLOPE IS -.3

  14. SLOPE AT A POINT ON A CURVE • Draw a tangent to the curve • Calculate the slope along the tangent • Note that the slope should be comparable to the slope along an arc.

  15. SLOPE AT A POINT ON A CURVE • Pt. 2 (0, 10) • Pt. 1 (40, 4) • Y2-Y1 • 10-4 = 6 • X2-X1 • 0-40 = -40 • 6/-40 = • THE SLOPE IS -.15

  16. SLOPE AT A POINT ON A CURVE • Pt. 2 (3, 3) • Pt. 1 (8, 23) • Y2-Y1 • 3-23 = -20 • X2-X1 • 3-8 = -5 • -20 / -5 = • THE SLOPE IS 4

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