1. TEXT: Michael Parkin and Bade Robin (2013) Microeconomics: Canada in the Global Environment, Eights Edition with MyEconLab

2. GRAPHS IN ECONOMICS

3. 40 30 20 10 0 1 2 34 5 B (1, 20) A (4, 5) Coordinate System

4. The slope of a relationship is the change in the value of the variable measured on the y- axis divided by the change in the value of the variable measured on the x-axis. We use the Greek letter  (capital delta) to represent “change in.” So  y means the change in the value of the variable measured on the y-axis and  x means the change in the value of the variable measured on the x-axis. Slope equals  y/  x.

5. The Slope of a Straight Line

6. Variables That Are Unrelated

8. Equation of a straight-line (linear) relationship Y = a + bX

9. Position of line: determined by the y- axis (vertical) intercept

10. Price (in dollars) Quantity $6 5 4 3 2 1 0 10 20 30 Nonlinear Curve 40

11. Slope at a Point The slope of a curved line at a point is equal to the slope of a straight line that is the tangent to that point.

13. Slope Across an Arc The average slope of a curved line across an arc is equal to the slope of a straight line that joins the endpoints of the arc.

14. Inverse and Direct Relationships X Y X Y Inverse relationship: When X goes up, Y goes down When X goes down, Y goes up Direct relationship: When X goes up, Y goes up When X goes down, Y goes down

15. Variables Moving in the Same Direction

16. Variables Moving in Opposite Directions

17. Income (in dollars) $14,000 13,000 12,000 11,000 10,000 1992 1994 1996 (a) Income over time (1) The Importance of Scales Income (in dollars) $18,000 16,000 14,000 12,000 10,000 1992 1994 1996 (b) Income over time (2)

18. Variables That Have a Maximum or a Minimum

19. Maximum Point Maximum Slope = 0 A

20. Minimum Point Slope = 0 Minimum B

21. Types of variables There are two types of variables - independent and dependent. Independent variable (the cause variable, controlled variable, manipulated variable, explanatory variable) is a variable that stands alone and is not changed by the other variables the model in question measures. Dependent variable (outcome variable, response variable, measured variable, explained variable) is a variable that depends on other variables in a model