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Chapter 1

Economics 1021A/B Chapter Notes - Chapter 1: Ceteris Paribus


Department
Economics
Course Code
ECON 1021A/B
Professor
Bruce Hammond
Chapter
1

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Chapter 1 Appendix
Graphics in Economics
Graphing Data
Making a graph:
o The horizontal line is the x-axis.
o The vertical line is the y-axis.
o The intersection of the x-axis and the y-axis is the origin.
A scatter diagram plots the value of one variable against the value of another variable.
Graphs Used in Economic Models
Variables that move in the same direction
o A relationship between two variables that move in the same direction is called a
positive relationship or a direct relationship.
o A relationship shown by a straight line is called a linear relationship.
Variables that move in opposite directions
o A relationship between variables that move in opposite directions is called a negative
relationship or an inverse relationship.
Variables that have a maximum or a minimum
o A relationship that has a maximum slopes upward as it rises to its maximum point, is flat
at its maximum, and then slopes downward.
o A relationship that has a minimum slopes downward as it falls to its minimum point, is
flat at its minimum, and then slopes upward.
Variables that are unrelated
o Variables that are unrelated are shown on a graph as either a horizontal line or a vertical
line.
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