Economics for Today - Chapter 01 Appendix: Applying Graphs to Economics

This set of vocabulary flashcards covers fundamental graphical concepts in economics, including relationship types, slope calculations, and the distinction between movements and shifts.

Direct Relationship

A positive association between two variables where both variables increase or decrease together.

Graphical Expression of a Direct Relationship

Expressed graphically as an upward sloping curve (or line).

Inverse Relationship

A negative association between two variables where one variable increases while the other decreases, and vice versa.

Graphical Expression of an Inverse Relationship

Expressed graphically as a downward sloping curve (or line).

Slope

The ratio of the change in the variable on the vertical axis (the rise or fall) to the change in the variable on the horizontal axis (the run).

Slope Formula

$$\text{Slope} = \frac{\text{rise}}{\text{run}} = \frac{\text{change in vertical axis}}{\text{change in horizontal axis}} = \frac{\Delta y}{\Delta x}$$

Independent Relationship

A zero association between two variables where one variable changes and the other variable remains unchanged.

Three-Variable Relationship

A graph showing a shift in a curve when the ceteris paribus assumption is relaxed and a third variable not on either axis is allowed to change.

Movement along a curve

Caused by a change in one of the variables shown on either of the coordinate axes of the graph.

Shift in a curve

Caused by a change in a variable not shown on one of the coordinate axes of the graph.