Applying Graphs to Economics OBJECTIVES Define a direct relationship Define an inverse relationship Calculate the slope of a straight line Illustrate a three-variable relationship in one graph

Direct Relationship Positive association between 2 variables When one variable increases, the other variable increases When one variable decreases, the other variable decreases As cholesterol levels increase, the likelihood of developing heart disease increases. As you decrease the amount of time you study, your GPA decreases. Plot the 4 points in the table on the graph in exhibit 1. A direct relationship is illustrated graphically by an upward-sloping curve.

Inverse Relationship Negative association between 2 variables When one variable increases, the other variable decreases When one variable decreases, the other variable increases As the price of concert tickets increases, the number of tickets purchased decreases. As the temperature drops, heating oil sales increase. Plot the 4 points in the table on the graph in exhibit 2. An inverse relationship is illustrated graphically as a downward-sloping curve.