Chapter 1 Appendix

1
Chapter 1Appendix
MACROECONOMICS EXPLORE APPLYby Ayers and
Collinge
2
Working with Graphs and Data

• Graphs clarify thoughts and show economic
  relationships in a way that can be more easily
  understood that with words alone.

3
Working with Graphs and Data

• Graphs that present factual information are often
  drawn as line graphs, bar charts, and pie charts.
• Other graphs represent economic models and
  contain lines that are referred to as curves.

4
Direct versus InverseRelationships
Y variable
Direct Relationship (positive) upward
sloping to the right.
Inverse Relationship (negative) downward sloping
to the right.
X Variable
5
Direct Relationships
Data Point Community Yearly Rainfall Umbrella Sales
A Center City 30 inches 100 units
B Moose Haven 40 inches 200 units
C Blountville 50 inches 300 units
D Houckton 60 inches 400 units
E Echo Ridge 70 inches 500 units
6
Positive Slope
Umbrella Sales
500
Slope 100/10 10
400
300
200
100
Yearly Rainfall
10
20
30
40
50
60
70
80
7
Inverse Relationships
Data Point City Coat Sales Average January Temperatures
F Tropical City 100 units 50 degrees
G North Town 200 units 40 degrees
H Snowbound 300 units 30 degrees
I Cold City 400 units 20 degrees
J Arctica 500 units 10 degrees
8
Negative Slope
Sales of woolen coats
500
Slope -100/10 -10
400
300
200
100
January temperatures
10
20
30
40
50
60
70
80
9
Information at the Margin
The slope shown equals 25, which means that the
additional spending by restaurant
customers decreases by 25 with each passing hour.
Incremental Spending
100
75
50
0
Hours
1
2
3
10
A Shift in the Curve
Umbrella Sales
When a curve changes position, we say there has
been a shift in the curve. A shift represents a
new relationship between the variables.
500
400
300
200
100
Yearly Rainfall
10
20
30
40
50
60
70
80
11
An Intersection Point
Y
Curve 1
Curve 1
X
12
The End! Next Chapter 2 Production and Trade"