Fundamentals of Economics. Доловова Н.Н - 54 стр.

UptoLike

ВУЗ: 

УлГТУ | Ульяновск

Составители: 

Рубрика: 

54
54
Constructing a graph
A graph is merely a visual representation of the relationship between two
variables.
Table 1 provides us with a simple hypothetical illustration which shows the
relationship between income and consumption. Without ever having studied eco-
nomics, one would expect intuitively that high-income people would consume more
than low-income people. Thus we are not surprised to find in Table 1 that
consumption increases as income increases.
How can the information in Table 1 be expressed graphically? Glance at the
graph shown in Figure 1. Now look back at the information in Table 1 and we will
explain how to represent that information in a meaningful way by constructing the
graph you just examined.
What we are trying to show visually, or graphically, is how consumption
changes as income changes. Since income is the determining factor, we represent it
on the horizontal axis of the graph as is customary. And, because consumption is de-
pendent upon income, we represent it on the vertical axis of the graph as is also
customary. Actually, what we are doing is representing the independent variable on
the horizontal axis and the dependent variable on the vertical axis.
Now we simply have to arrange the vertical and horizontal scales of the graph
so that they conveniently reflect the range of values of consumption and income, as
well as to mark the steps in convenient graphic increments. As you can see, the
ranges in the graph cover the ranges of values in Table 1. Similarly, as it so happens
in this example, the increments on both scales are $100 for approximately each half-
inc h.
Next, we have to locate for each consumption value and the income value that
it depends upon a single point which reflects the same information graphically. Our

Страницы