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Economics 20th Edition by Campbell McConnell ,Stanley Brue ,Sean Flynn
Edition 20ISBN: 978-0077660772Economics 20th Edition by Campbell McConnell ,Stanley Brue ,Sean Flynn
Edition 20ISBN: 978-0077660772 Exercise 1
Briefly explain the use ofgraphs as away to represent economic relationships. What is an inverse relationship? How does it graph? What is a direct relationshipr-How does it graph?
Explanation
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Graphs are very important in economics as it represents the behavior of one variable when another variable moves. For example, a very important relation that is seen in introductory economics is the relationship between price and quantity. If we are at consumers, we would expect that as the price of goods goes up, the quantity demanded of the good will go down. The relation that as one variable goes up, the other variable goes down is called an inverse relationship, and can be represented with a downward sline as shown in the graph bedirect relationship between two variables can be defined in this way: if one variable goes up, the other variable also goes up. This is mostly seen in the supply of a good. If we are at the producers of a good, we would expect that when the price is producers probably don't want to produce that much. However, when the price is high, producers can make more money and thus will want to sell more of that item. Thus, here, we will get a graph with an upward sline as shown below.
Economics 20th Edition by Campbell McConnell ,Stanley Brue ,Sean Flynn
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