Skills

Graph skills you need: the one-page sheet

Axes, Variables and Points

Every economics graph has two labeled axes, and every point on it is one ordered pair: the horizontal value first, then the vertical value. Points that rise together show a direct relationship; points that move in opposite directions show an inverse one. Label every axis and every curve, with the standard variable on each axis, because that is the first thing a reader checks.

The horizontal axis runs across the bottom; the vertical axis runs up the side. A market graph puts Price on the vertical axis and Quantity on the horizontal one.
A point is an ordered pair (horizontal value, vertical value): (300, 10) is 300 across and 10 up.
In a direct relationship both variables rise together; in an inverse relationship one rises as the other falls.
On the exam an unlabeled or swapped axis loses the graph point, even when the drawing is right.

every point on the graph stands for one pair of values you can plot a row of a table or read one off the graph the graph shows a direct or an inverse relationship your graph can earn its labeling point on the exam

axis (graph): One of the two number lines of a graph: the horizontal axis runs across the bottom and the vertical axis runs up the side. Each is labeled with the variable it measures.
coordinate point: A point on a graph written as an ordered pair (horizontal value, vertical value), such as (300, 10).
direct relationship: A direct (positive) relationship: two variables rise or fall together. In an inverse (negative) relationship, one rises as the other falls.

Slopes and Curve Shapes

Slope is rise over run, the change in the vertical value divided by the change in the horizontal value. A line that rises to the right has a positive slope, one that falls has a negative slope, a horizontal line has a slope of zero, and a vertical line keeps the horizontal value fixed. A straight line has the same slope at every point, while a bowed curve changes slope as you move along it.

Slope = rise over run = change in the vertical value divided by the change in the horizontal value.
Upward sloping: positive slope, a direct relationship. Downward sloping: negative slope, an inverse relationship.
A vertical line keeps the horizontal value fixed; a horizontal line keeps the vertical value fixed and has a slope of zero.
A straight line has one slope everywhere; a bowed curve does not.

you can find the rise (change in the vertical value) and the run (change in the horizontal value) you get the slope, positive if the line rises and negative if it falls one variable stays fixed while the other changes its slope changes along it, getting steeper as it falls

slope: How steep a line is: the change in the vertical value divided by the change in the horizontal value between two points (rise over run).
upward-sloping curve: An upward-sloping curve rises to the right (positive slope); a downward-sloping curve falls to the right (negative slope). A vertical line keeps the horizontal value fixed; a horizontal line keeps the vertical value fixed.

Shifts Versus Movements Along a Curve

Every curve is drawn holding other things equal. A change in a variable on one of the axes moves you along the curve to a new point; a change in anything else shifts the whole curve right or left. On the exam, name the cause, decide shift or movement, draw the new curve with a new subscript and an arrow, and label everything.

Movement along a curve: caused by a change in a variable on one of its axes (on a market graph, the price).
Shift of a curve: caused by a change in anything else. Right means a larger quantity at every price; left means a smaller one.
Ceteris paribus ("other things equal") is the rule behind every curve: one of those other things changing is what shifts it.
Label a shifted curve with a new subscript (D1 to D2) and draw an arrow showing the direction.

it shows only how the two graphed variables relate you move along the curve to a new point the whole curve shifts, right or left a reader can score the curve and the direction

movement along a curve: A move from one point to another on the same curve, caused by a change in a variable on one of the graph's axes, such as the price of the good.
shift of a curve: The whole curve moving to a new position because something other than the graphed variables changed; right means a larger quantity at every price, left a smaller one.
ceteris paribus: Latin for "other things equal": the rule that a curve holds every influence fixed except the two variables it graphs.

Where Curves Cross

Where two curves cross, they agree on one price and one quantity. When one curve shifts, the crossing slides along the other curve to a new point. Mark both crossings with dashed lines to both axes, label the old and new values, and state the direction of each change: that before-and-after comparison is what readers score on every graph in the course.

The intersection point is where two curves cross: on a market graph, the price at which the quantity buyers want equals the quantity sellers offer.
When one curve shifts, the crossing slides along the curve that did not move.
A before-and-after comparison marks both crossings, E1 and E2, with dashed lines to both axes (P1, P2, Q1, Q2) and says which way each moved.

that point gives the one price and quantity both curves agree on (E1) the crossing moves along the other curve to a new point (E2) you can compare the old and new price and quantity "the price rises from P1 to P2" earns the point

intersection point: The point where two curves cross. On a market graph it gives the one price at which the quantity buyers want equals the quantity sellers offer.
before-and-after comparison: Comparing the crossing point before and after a curve shifts (E1 and E2), on both axes, to say which way each variable moved.