1. 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

2. 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.

3. 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.