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GRAPHS IN ECONOMICS

This study guide focuses on graphs in economics, particularly on analyzing positive and negative relationships between variables. The positive relationship graph demonstrates an increasing trend, where an increase in X corresponds to an increase in Y, while the negative relationship graph shows a decreasing trend, where an increase in X results in a decrease in Y. This guide includes multiple-choice questions and short answer formats to test understanding of these fundamental concepts.

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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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