1.A - Graphs in Economics

True/false: it is possible for the graph of a positive relationship to have a slope that becomes smaller when moving rightward along the graph.

true: a curved line showing a positive relationship can decrease in steepness and still be considered a positive relationship as long as the slope continues to rise.

True/false: the x-axis is the horizontal scale line.

true: and the y-axis is the vertical scale line.

True/false: if the graph of the relationship between two variables slopes upward to the right, the relationship between the variables is positive.

true: if the graph slopes upward to the right, then an increase in the variable measured along the horizontal axis is associated with an increase in the variable measured on the vertical axis.

True/false: the slope of a curved line is NOT constant.

true: only the slope of a straight line is constant.

True/false: for a straight line, if a large change in y is associated with a small change in x, the line is steep.

true: the definition of slope is change in y divided by change in x; if a large change in y (the numerator) is associated with a small change in x (the denominator), the magnitude for the slope indicates that the line is relatively steep.

True/false: the slope of a curved line at a point equals the slope of a line tangent to the curved line at the point.

true: this question tells precisely how to calculate the slope at a point on a curved line.

True/false: to the left of a minimum point, the slope is negative; to the right, the slope is positive.

true: to the left of the minimum, the line is falling, so its slope is negative; to the right of the minimum, the line is rising, so its slope is positive.

True/false: if the relationship between y (measured on the vertical axis) and x (measured on the horizontal axis) is one in which y reaches a maximum, the slope of the relationship must be negative before positive after the maximum.

false: before the maximum, the relationship is positive; after the maximum is reached, the relationship is negative.

True/false: ceteris paribus means "everything else changes".

false: ceteris paribus means that only the variable being studied changes; all other variables do not change.

True/false: the amount of corn a farmer grows depends on its price and the amount of rainfall. The curve showing the relationship between the price of a bushel of corn and the quantity grown is the same curve regardless of the amount of rainfall.

false: for different amounts of rainfall, there are different curves showing the relationship between the price of a bushel of corn and the quantity that is grown.

True/false: graphing things that are unrelated on one diagram is NOT possible.

false: if two unrelated variables are graphed on the same diagram, the "relationship" between the two is either a vertical or a horizontal straight line.

True/false: the slope of a straight line is calculated by dividing the change in the value of the variable measured on the horizontal axis by the change in the value of the variable measured on the vertical axis.

false: just the opposite is true; divide the change in the variable on the vertical axis by the change in the variable on the horizontal axis.

True/false: a graph showing a positive relationship between stock prices and the nation's production means that an increase in stock prices causes an increase in production.

false: the graph shows a correlation between stock prices and production, but that does not necessarily mean that an increase in stock prices causes an increase in production.

True/false: the origin is the point where a graph starts.

false: the origin is where the horizontal and vertical axes start, not where the graph starts.

centeris paribus

other things being equal - all other relevant things remaining the same

slope

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

scatter diagram

a graph that plots the value of one variable against the value of another variable for a number of different values of each variable

linear relationship

a relationship between two variables that is illustrated by a straight line

inverse relationship

a relationship between two variables that move in opposite directions

direct relationship

a relationship between two variables that move in the same direction

negative relationship

a relationship between variables that move in opposite directions

positive relationship

a relationship between variables that move in the same direction