Price and quantity direct relationship in science If you are going to understand science or physics in general you MUST Direct relationship example: If the weight What is the constant (k)? Price per pound. Each point on the curve reflects a direct correlation between quantity demanded ( Q) and price (P). So, at point A, the quantity demanded will be Q1 and the price. Two types of relationships between variables are direct and inverse variation. The graph of the relationship between quantities that vary inversely is one.

Choice of axes for dependent and independent variables[ edit ] An example of real GDP y plotted against time x. Often time is denoted as t instead of x. The IS curve moves to the right if spending plans at any potential interest rate go up, causing the new equilibrium to have higher interest rates i and expansion in the "real" economy real GDP, or Y. In most mathematical contexts, the independent variable is placed on the horizontal axis and the dependent variable on the vertical axis.

For example, if f x is plotted against x, conventionally x is plotted horizontally and the value of the function is plotted vertically. This placement is often, but not always, reversed in economic graphs. For example, in the supply-demand graph at the top of this page, the independent variable price is plotted on the vertical axis, and the dependent variable quantity supplied or demandedwhose value depends on price, is plotted horizontally. In a negative or indirect relationship, the two variables move in opposite directions, that is, as one increases, the other decreases. Consider the price of coffee and the demand for the good.

As the price of coffee, for example, goes to higher and higher levels, we can predict that people will substitute tea or hot chocolate for it, and buy less. As the price of coffee declines, people will buy more and more of it, and quite possibly buy more than they would regularly buy, and store or accumulate it for future consumption, or to sell it to others. This relationship is negative or indirect, that is, as the price variable typically, in economics, the y variable increases, the quantity variable typically, the x variable decreases; and, as the price variable decreases, the quantity demanded increases.

These relationships between positivly- and negatively-related variables are demonstrated in the graphs Figure 1 which follow, positive first and negative second: What is the value of graphs in the study of economics?

Graphs are a very powerful visual representation of the relationship between or among variables. They assist learners in grasping fairly quickly key economic relationships.

Variation, Direct and Inverse

Years of statistical analysis have gone into the small graph you can examine to learn about key forces and trends in the economy. Further, they help your instructor to present data in a way which is small-scale or economical, and establish a relationship, frequently historical, between variables in a certain kind of relationship.

They permit learners and instructors to establish quickly the peaks and valleys in data, to establish a trend line, and to discuss the impact of historical events such as policies on the data that we wish to analyze.

Types of Graphs in Economics There are various kinds of graphs used in business and economics that illustrate data. These include pie charts segments are displayed as portions, usually percentages, of a circlescatter diagrams points are connected to establish a trendbar graphs results for each year can be displayed as an upward or downward barand cross section graphs segments of data can be displayed horizontally.

You will deal with some of these in economics, but you will be dealing principally with graphs of the following variety. Certain graphs display data on one variable over a certain period of time.

For example, we may want to know how the inflation rate has varied in the Canadian economy from We would choose an appropriate scale for the rate of inflation on the y vertical axis; and on the x horizontal axis show the ten years from to with on the left, and on the right. We would notice right away a trend. The trend in the inflation rate data is a decline, actually from a high of 5.

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We would see that there has been some increase in the inflation rate since its absolute low inbut not anything like the high. And, if we did such graphs for each of the decades in Canada sincewe would see that the s were a unique decade in terms of inflation. No decade, except the s, shows any resemblance to the s.

• Economic graph

We can then discuss the trends meaningfully, since we have ideas about the data over a major period of time. We can link the data with historical events such as government anti-inflation policies, and try to establish some connections.

Other graphs are used to present a relationship between two variables, or in some instances, among more than two variables. Consider the relationship between price of a good or service and quantity demanded.

The two variables move in opposite directions, and therefore demonstrate a negative or indirect relationship. Aggregate demand, the relationship between the total quantity of goods and services demanded in the entire economy, and the price level, also exhibits this inverse or negative relationship. If the price level based on the prices of a given base year rises, real GDP shrinks; while if the price level falls, real GDP increases.

Further, the supply curve for many goods and services exhibits a positive or direct relationship. The supply curve shows that when prices are high, producers or service providers are prepared to provide more goods or services to the market; and when prices are low, service providers and producers are interested in providing fewer goods or services to the market.

The aggregate expenditure, or supply, curve for the entire Canadian economy the sum of consumption, investment, government expenditure and the calculation of exports minus imports also shows this positive or direct relationship. Construction of a Graph You will at times be asked to construct a graph, most likely on tests and exams. You should always give close attention to creating an origin, the point 0, at which the axes start.

Label the axes or number lines properly, so that the reader knows what you are trying to measure. Most of the graphs used in economics have, a horizontal number line or x-axis, with negative numbers on the left of the point of origin or 0, and positive numbers on the right of the origin. Figure 2 presents a typical horizontal number line or x-axis. In economics graphs, you will also find a vertical number line or y-axis.

Here numbers above the point of origin 0 will have a positive value; while numbers below 0 will have a negative value. Figure 3 demonstrates a typical vertical number line or y-axis. Therefore, if it takes 5 hours at 20 mph, 5 is divided by 3 to find the travel time at 60 mph. In general, variables that vary inversely can be expressed in the following forms: The graph of the relationship between quantities that vary inversely is one branch of a hyperbola.

See part b of the figure. The graph is asymptotic to both the positive x -and y -axes. In other words, if one of the quantities is 0, the other quantity must be infinite.

For the example given here, if the average rate is 0 mph, it would take forever to go miles; similarly, if the travel time is 0, the average rate must be infinite. Many pairs of variables vary either directly or inversely. If variables vary directly, their quotient is constant; if variables vary inversely, their product is constant. In direct variation, as one variable increases, so too does the other; in inverse variation, as one variable increases, the other decreases. Merrill Algebra 2 with Trigonometry Applications and Connections.

Kanold, and Lee Stiff. Heath and Company,