part 1: an introduction to economics and the economy ©2013 mcgraw-hill ryerson ltd. prepared by dr....
TRANSCRIPT
PART 1: AN INTRODUCTION TO ECONOMICS AND THE ECONOMY
©2013 McGraw-Hill Ryerson Ltd.
Prepared by Dr. Amy PengRyerson University
LO7
Table Graph
IncomeConsumptionPoint
$ 0
100
200
300
400
$ 50
100
150
200
250
a
b
c
d
e
Con
su
mp
tion
(C
)
Income (Y) $100 200 300 400
a
b
c
d
e
$400 300 200
100
0
1-2©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 2
LO7
Direct Relationship
1-3©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 3
LO7
Inverse Relationship
1-4©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 4
LO7
Con
su
mp
tion
(C
)
Income (Y) $100 200 300 400
$400 300 200
100
0
Slope =Vertical Change
Horizontal Change
+50
+100= 0.5==
1
2
50
100
VerticalChange
Horizontal Change
1-5©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 5
LO7 ©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 6
Ticket Price
Attendance,
thousands
$50 0
40 4
30 8
20 12
10 16
0 20
1-6
LO7
Slope =Vertical Change
Horizontal Change=
-10
+4=
1
2-2
5
0
4
0
3
0
2
0
1
0
4 8 12 16 20
-10
4
Horizontal Change
VerticalChange
Tic
ket
Pri
ce
$
Attendance
= -2.5
1-7©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 7
Slopes and measurement units
Slopes and marginal analysisInfinite and zero slopes
©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 8
LO7
Pri
ce o
f B
an
an
as
Con
su
mp
tion
Purchases of digital cameras Divorce Rate
Slope = Infinite
Slope = Zero
1-9©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 9
y = a + bx y is the dependent variable a is the vertical intercept b is the slope of the line x is the independent variable
©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 10
LO7
Con
su
mp
tion
(C
)
Income (Y)
$100 200 300 400
$400 300 200
100
0
Y = 50 + .5C
1-11©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 11
P = 50 – 2.5Q
LO7
5
0
4
0
3
0
2
0
1
0
4 8 12 16 20
Tic
ket
Pri
ce
Attendance
1-12©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 12
Slope always changesMust use a line tangent to the curve to find slope at that point
©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 13
LO7
20
15
10
5
0
5 10 15 20
1-14©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 14
Graphs represent economic relationship Positive/directly related variables and
positive sloped line Negative/inversely related variables
and negative sloped line The slope of a straight line is the ratio
of the vertical change to the horizontal change between any two points.
The slope of a curve at any point is determined by calculating The slope of a straight line tangent to the curve at that point.
©2013 McGraw-Hill Ryerson Ltd. Appendix 1.1 15