A Basic Concept of Graphs

Graphs in business and economics visually tell you how two or more variables are related to one another.

In a line graph, the slope of the line tells you how. Remember "rise divided by run". Rise is the change in the verticle axis, while run is the change in the horizantal.

Here's a little homework assignment. On a piece of graph paper (or an excel spread sheet) draw a couple of x,y lines 10 squares across and 10 squares up. x (the horizantal line) = # hamburgers you can buy; y (the vertical line) = number of sodas. Here's your budget: slope = -2. How would you draw the line?

If x = 0, then y = 10. If x = 1, then y = 8. If x = 2, then y = 6. What's the maximum number of hamburgers in the budget? Extending the line to y = 0 will cross the x axis at 5.

Graph analysis get's way more complicated than this but is very useful!