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Transcript Intercepts

Key Terms/Tasks
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1.
2.
3.
4.
5.
6.
Plotting coordinates
Vertical intercept
Horizontal intercept
Slope
Ceteris paribus: how relates
Tangency
Demand for Concert
Tickets
Point on
Curve
a
Ticket Price Ticket
Demand
$250
0
b
$200
40
c
$150
80
d
$100
120
e
$50
160
f
$0
200
Relate to Demand
Theory
• Ceteris Paribus Assumption: “Other
Things Equal” means that the graph
is just two-dimensional and
everything ELSE related to quantity
demanded OTHER than price is held
constant.
• If ceteris paribus factors change,
must draw entirely new line.
• Negative relationship between
quantity demanded and price—Line
slopes down. Comes from Law of
Demand.
Further Details
• For folks with math
background: with this graph,
economists put the independent
variable (price) on the vertical
axis and the dependent variable
(quantity demanded) on the
horizontal axis. This is opposite
to what is done in math.
• The shape of the demand
curve is the SLOPE. Since the
curve is downward-sloping, we
say the slope is negative.
Calculating Slope
• Calculate slope as movement
from one point to another.
• Slope = rise/run
• Slope = (P) / (Qd)
• Using previous graph drawn:
• Slope = (200-150)/(40-80)=
• 50/-40 = 5/-4 = -1.25.
Intercepts
• Intercepts are where the line
hits the vertical and horizontal
axis.
• Vertical intercept: answers
question—what is price when
Qd=0? Can show on graph and
see in table.
• Horizontal intercept: answers
question—what is Qd when
P=0? Can show on graph and
see in table.
Measuring Slope of
Nonlinear Curve
• Slope of a nonlinear curve is
NOT a constant, so slope will
be different at each different
point along the curve.
• Measure slope at a particular
point by first drawing a line
tangent to the curve at that
point, and then calculating the
slope of that tangent line.
• Note that tangent means
touches at one point.
Slope of Nonlinear
Curve
In-Class Exercise
POINT
Video Price
Video Qd
a
$60
0
b
50
3
c
40
6
d
30
9
e
20
12
f
10
15
g
0
18
Tasks to Complete
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Draw graph
Describe relationship
Calculate slope
Identify both intercepts