econ 201/202 review of essential math and graphing skills
DESCRIPTION
Slope of linear function FIGURE 1A-3 Plotting Price and Quantity Points in a Graph Demand Curve: Graphs of Two Variables (price and quantity)TRANSCRIPT
Econ 201/202
Review of EssentialMath and Graphing Skills
What do you need to know?
• Calculating and interpreting slopes of graphs– Linear and non-linear functions
• Calculating and interpreting areas under a graph– Geometric areas: triangles, rectangles– More sophisticated – integrals (or summing
up)• Systems of equations
– Interpreting the results– Simultaneous equations and equilibrium
Slope of linear function
FIGURE 1A-3Plotting Price and Quantity Points in a Graph
Demand Curve: Graphs of Two Variables (price and quantity)
Appendix
FIGURE 1A-4Calculating the Slope of a Line
Graphs of Two VariablesSlopes of Lines
Δ
Δ
Change in value on the vertical axis y RiseSlope
Change in value on the horizontal axis x Run
($12 $14) 20.2
(65 55) 10
Δ
Δ
Price of pizzaSlope
Quantity of pizza
Appendix
FIGURE 1A-5Showing Three Variables on a Graph
Graphs of Two VariablesTaking into Account More Than Two Variables on a Graph
Appendix
FIGURE 1A-6Graphing the Positive Relationship between Income and Consumption
Graphs of Two VariablesPositive and Negative Relationships
AppendixGraphs of Two Variables
Are Graphs of Economic Relationships Always Straight Lines?
The graphs of relationships between two economic variables that we have drawn so far have been straight lines. The relationship between two variables is linear when it can be represented by a straight line.
Few economic relationships are actually linear.
AppendixGraphs of Two Variables
Slopes of Nonlinear Curves FIGURE 1A-8The Slope of a Nonlinear Curve
AppendixFormulas
Formulas for the Areas of a Rectangle and a Triangle
FIGURE 1A-9Showing a Firm’s Total Revenue on a Graph
height x baserectangle a of Area
AppendixFormulas
Formulas for the Areas of a Rectangle and a Triangle
FIGURE 1A-10The Area of a Triangle
height x base x trianglea of Area 1/2
AppendixFormulas
Formula for a Percentage Change
100x GDP
GDPGDP
2003
20032004
100x )periodfirst thein Value
periodfirst thein Value - period second thein Value( change Percentage
One important formula is the percentage change.
The percentage change is the change in some economic variable, usually from one period to the next, expressed as a percentage.
AppendixFormulas
Summary of Using Formulas
1 Make sure you understand the economic concept that the formula represents.
2 Make sure you are using the correct formula for the problem you are solving.
3 Make sure that the number you calculate using the formula is economically reasonable. For example, if you are using a formula to calculate a firm’s revenue and your answer is a negative number, you know you made a mistake somewhere.
Whenever you must use a formula, you should follow these steps: