Graphs in Economics
Creating, Using, and Interpreting Economic Graphs:
  • Economists love graphs
  • A graph represents a theory or idea in a 2 dimensional space
  • Linear Graphs
    • y = mx + b  ==>  equation of a straight line
      • b is the value where the line crosses the vertical axis
      • m is the slope of the line  (note that the slope remains constant in a straight line)
                vertical distance between 2 points on the line
          m = --------------------------------------------------
               horizontal distance between 2 points on the line
  • Nonlinear Graphs
    • y = xp  ==>  the equation of a curved line
      • where p can be any negative or positive number other than zero
      • the slope of a curved line changes (i.e., the slope does NOT remain constant)

review Appendix A Chapter 21  --  Graphs in Economics

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this page is maintained by Reed Fisher
last updated January 15, 2011