Economics

1. Economics Graphing/Math Primer 7 Oct 2010

2. Why Graphing?

3. Economics…. • Uses graphs • Graphs describe: • Relationships • Behavior Patterns • Interaction • Markets • Society

4. Objectives • Define these terms: • Constant • Variable • Be able to identify whether a term is a… • Constant • Variable • Identify whether an item is a dependent or independent variable • Identify X and Y axes (horizontal and vertical) • Identify the origin on a graph • Identify X and Y coordinates on a point • Plot points on the graph

5. Math is like an insect…. (a lot of us fear it!)

6. Variables and Constants • In economics, characteristics or elements such as prices, outputs, income, etc., are measured by numerical values. • Some of these will always remain the same, and some will change. • The characteristic or element that remains the same is called a constant. • For example, the number of donuts in a dozen is always 12. That means the number of donuts in a dozen is a constant.

7. Variables and Constants (cont) • While some of these characteristics or elements remain the same, some of these values can vary (e.g., the price of a dozen donuts can change from $2.50 to $3.00) • We call these characteristics or elements variables. • Variable is the generic term for any characteristic or element that changes. You should be able to determine which characteristics or elements are constants and which are variables.

8. Identifying variables and constants • Example--Which of the following are variables and which are constants? • The temperature outside your house. • This is a variable. The temperature outside your home will change depending on the weather. • The number of square feet in a room that is 12 ft by 12 ft. • This is a constant. The square feet in a room 12 ft by 12 ft is always 144 square feet. It does not change. • The noise level at a concert. • This is a variable. The noise level changes depending on the number of people talking and yelling at any given time.

9. Relationships between variables • We express a relationship between two variables, which we will refer to as x and y, by stating the following: • The value of the variable y depends upon the value of the variable x. We can write the relationship between variables in an equation. • For instance: • y = a + bx • is an example of a relationship between x and y variables. • The equation also has an "a" and "b" in it. • These are constants that help define the relationship between the two variables. • In this equation the y variable is dependent on the values of x, a, and b. • The y is the dependent variable. • The value of x, on the other hand, is independent of the values y, a, and b. • The x is the independent variable.

10. Example • Pizza Restaurant • $7.00 for Cheese Pizza • $0.75 for each additional topping • Total Price (Y) • Depends on number of toppings you order (X) • Y = a + bX

11. Pizza equation explained Price per Topping Y = a + bX Total Price Number of Toppings Price of Plain Pizza

12. Pizza Equation (continued) • Plain Pizza is $7.00 • Each additional topping is $0.75 • We get this: • Y = $7.00 +$0.75(X)

14. Y Axis (Dependent Variable) X Axis (Independent Variable)

15. Any Questions?