Skills

Graph skills you need: the one-page sheet

Axes, Variables and Points

A graph has two labeled axes: the horizontal axis (x) and the vertical axis (y). On a market graph, quantity goes on the horizontal axis and price on the vertical. Each row of a table becomes an ordered pair (horizontal value, vertical value), and you read a point by dropping lines to both axes. Points that rise to the right show a direct relationship; points that fall to the right show an inverse one.

The horizontal axis (x-axis) runs left to right; the vertical axis (y-axis) runs up. On a market graph, quantity goes across and price goes up.
An ordered pair (x, y) names one point: first the horizontal value, then the vertical value.
To read a point, drop a line straight down to the horizontal axis and across to the vertical axis.
A direct relationship: both variables rise together, so the points rise to the right. An inverse relationship: one rises as the other falls, so the points fall to the right.
Label both axes every time. An unlabeled axis loses the graph point on the exam.

one goes on the horizontal axis and one on the vertical axis, each labeled with its name and units it becomes one ordered pair (horizontal value, vertical value) the points show a pattern you can read at a glance the variables have a direct or an inverse relationship

horizontal axis: One of the two number lines of a graph: the horizontal axis (x-axis) runs left to right and the vertical axis (y-axis) runs up. On a market graph quantity goes across and price goes up.
ordered pair: Two numbers in parentheses, (x, y), that locate one point: the horizontal value first, then the vertical value.
direct relationship: A direct (positive) relationship means two variables rise and fall together; an inverse (negative) relationship means one rises as the other falls.

Slopes and Curve Shapes

Slope measures how steeply a line rises or falls: the rise (vertical change) divided by the run (horizontal change). A positive slope rises to the right, a negative slope falls to the right, and a horizontal line has a slope of 0. A straight line keeps one slope; a curve changes slope as you move along it. A U-shaped curve has a negative slope, then a slope of 0 at its minimum point, then a positive slope.

Slope = rise over run = (change in the vertical value) divided by (change in the horizontal value). Subtract in the same order on top and bottom.
Positive slope: the line rises to the right (a direct relationship). Negative slope: it falls to the right (an inverse relationship). A horizontal line has a slope of 0.
A straight line has the same slope everywhere. A curve has a slope that changes from point to point.
A U-shaped curve falls, then rises. At its minimum point the slope is 0: the curve stops falling and starts rising.

the vertical change is the rise and the horizontal change is the run you get the slope: how much the vertical variable changes for each one-unit change in the horizontal one the slope is positive and the line rises to the right the slope is negative and the line falls to the right

slope: How steeply a line rises or falls: the rise (change in the vertical value) divided by the run (change in the horizontal value).
U-shaped curve: A curve that falls, reaches a minimum point where its slope is 0, and then rises.

Shifts and Movements Along a Curve

A curve on a market graph shows how quantity relates to price with everything else held equal. When the good's own price changes, the market moves along the same curve to a new point. When anything else changes, such as buyers' incomes, sellers' costs or the number of buyers, the whole curve shifts: right for a larger quantity at every price, left for a smaller one. Show a shift with the old curve labeled 1, the new curve labeled 2 and an arrow between them.

Each curve holds everything except its two graphed variables constant ("other things equal").
A change in a variable on one of the axes is a movement along a curve: a new point, the same curve.
A change in anything else is a shift of a curve: the whole curve moves to a new position.
A shift right means a larger quantity at every price; a shift left means a smaller quantity at every price. Say "right" or "left", not "up" or "down".
Draw a shift so it scores: old curve with subscript 1, new curve with subscript 2, an arrow from old to new.

you ask whether it is one of the two variables on the axes buyers or sellers move along the same curve to a new point the whole curve shifts right or left, to a new curve you keep the old curve labeled with subscript 1, add the new one with subscript 2, and draw an arrow between them

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 axes, such as the good's own price.
shift of a curve: A move of the whole curve to a new position, caused by a change in something other than the two graphed variables; right means a larger quantity at every price, left a smaller one.
ceteris paribus: Latin for "other things equal": a curve shows how its two variables relate while everything else is held constant.

Curves That Cross and Areas

Where a downward curve and an upward curve cross, one price and one quantity lie on both curves: the intersection. Read it with dashed lines to both axes. When one curve shifts, the crossing point slides along the other curve, and you compare the old and new points to say what happened to price and quantity. Areas on graphs are rectangles (base × height) and triangles (½ × base × height), with the base read on the horizontal axis and the height on the vertical axis.

The intersection (crossing point) of two curves is the one point on both. Read its price and quantity with dashed lines to both axes.
When one curve shifts, the crossing point slides along the curve that stayed put. Label the old point E1 and the new one E2.
Area of a rectangle = base × height. Area of a triangle = ½ × base × height.
Read a base along the horizontal axis and a height along the vertical axis, from the shape's own edges.

they cross at exactly one point you get one price and one quantity that lie on both curves the crossing point slides along the curve that did not move to a new price and quantity you state which way the price and the quantity each changed

intersection: The point where two curves cross: the one price and quantity that lie on both curves.
area of a triangle: The space inside a shape on a graph: a rectangle's area is base × height and a triangle's is ½ × base × height, with the base read on the horizontal axis and the height on the vertical axis.