Graphs of Two Variables - Online Tutor, Practice Problems & Exam Prep

Understanding graphs is essential in economics, particularly when analyzing demand. The x-axis represents quantity, while the y-axis indicates price. To plot points, identify the price and quantity pairs from a demand schedule, such as (6,1) for price 6 and quantity 1. This process illustrates the law of demand, where a decrease in price typically leads to an increase in quantity demanded. Mastering these concepts lays the groundwork for exploring market equilibrium, elasticity of demand, and consumer surplus, which are crucial for analyzing economic behavior.

Plotting Points on a Graph

Hey, guys. I know a lot of you haven't seen graphs for a while, so I'm including this review to refresh you on a lot of those concepts. And if you feel a little more comfortable with the math, I still suggest watching it. You might get some value out of it. The first thing we've got here is our 2 variable graph on the left.

Okay. We're going to learn what the key parts of the graph are and how to plot points on the graph in this video. So first, we're going to label what are called the axes of the graph. So here on the bottom, what I've just highlighted in red, this is called the x axis for our x values, and on the other axis going up, we have the y axis. Cool? Generally, we're going to have numbers or values that tell us how much each jump in the graph is, and for now, we're just going to go 1, 2, 3, 4, 5, 6, 7. Right? And usually, when I give you graphs in this class, you're going to not have to do this. Right? I'll have done it already. I just figured the first time we do it together just so you get a feel for it.

So here on the right, I have what's labeled the demand schedule, and it's got some prices and some quantities. Right? So at certain prices, there's going to be certain quantities that are demanded, and later in the course, we're going to dive into these topics more. But for now, what I want to do is get these points onto the graph. Right? So the first thing we have to do is we're going to label one of our axes as the price and one of our axes as the quantity. In economics, we tend to label the y axis as price and the x axis as quantity. This is how they've been doing it. This is just the convention in economics that's been around for a long time. So this is how we will do it as well. Price on the vertical axis and quantity on the horizontal axis.

So let's go ahead and get these pairs, what we call pairs of numbers, and we're going to plot them on the graph. So let's start with the first one, which I'll call let's label them all a, b, c, d, e just so we know which one we're talking about when we're on the graph. So let's start with 6,1, a price of 6 and one demanded. So I'm going to go to my price axis and find 6 right up here, and I'm going to start going out. Right? And then when I go to the quantity axis, I'm going to find 1 and I'm going to go up from there, and I'm going to find the point where these two cross with each other. Right? So right here, that's going to end up being the point 6 for price and one for quantity right there. I'm going to erase some of those extra. Cool? So that's going to be point A right there.

Let's go ahead. I'm not going to change colors because I'm not going to have 5 different colors for this right now. I don't think we'll need it, but let's go ahead and plot the rest of these. So, actually for this one I'll use blue and then I'll rotate back to red just, just to keep it a little consistent. So here we have a price of 5 and a quantity of 2. So we'll find 5 on our price axis, 2 on our quantity axis, and we'll find the place where they mix or where they meet, and that's going to be right there, point B."

Let's go back to red and we'll do the same thing for C. So now we've got a price of 4 and a quantity of 3. Right? And that'll be point C right there. And now point D, I'm going to do in blue. And that's got a price of 3 and a quantity of 4. So you can see these are kind of the places where you could get mixed up. Which way, you know, which axis do I put the 3? Which one do I put the 4? So you just have to make sure that you're on the right axis when you start counting. So that'll be point D right there, and let's finish it up with E at a price of 2 and a quantity of 5. Right there. That's point E right there. Cool? So that's how we plot stuff onto the graph. I guess I'll put this as a blue b and a blue d just to match what we've got going there. Cool. Alright. Let’s move on to the next example.

Here’s what students ask on this topic:

What are the key parts of a two-variable graph in economics?

The key parts of a two-variable graph in economics include the x-axis, y-axis, and the plotted points. The x-axis typically represents the quantity of goods, while the y-axis represents the price. Each point on the graph corresponds to a pair of values (price, quantity) from a demand schedule. For example, a point (6,1) means a price of 6 and a quantity of 1. Understanding these components is crucial for analyzing economic concepts like demand, supply, and market equilibrium.

How do you plot points on a two-variable graph in economics?

To plot points on a two-variable graph in economics, follow these steps: First, label the x-axis as quantity and the y-axis as price. Next, identify the pairs of values (price, quantity) from a demand schedule. For each pair, find the corresponding price on the y-axis and the quantity on the x-axis. Plot the point where these two values intersect. For example, for a pair (6,1), find 6 on the y-axis and 1 on the x-axis, and plot the point where they meet. Repeat this for all pairs to complete the graph.

Why is the y-axis labeled as price and the x-axis as quantity in economics graphs?

In economics, the y-axis is labeled as price and the x-axis as quantity due to convention. This practice helps standardize the interpretation of graphs across different economic analyses. By consistently placing price on the vertical axis and quantity on the horizontal axis, economists can more easily compare and understand graphs depicting demand, supply, and other economic relationships. This convention has been widely adopted and helps in maintaining clarity and consistency in economic studies.

What is the law of demand and how is it illustrated on a graph?

The law of demand states that, all else being equal, as the price of a good decreases, the quantity demanded increases, and vice versa. This relationship is illustrated on a graph with a downward-sloping demand curve. Each point on the curve represents a price-quantity pair from a demand schedule. For example, a point (6,1) indicates a price of 6 and a quantity of 1. As you move down the curve, lower prices correspond to higher quantities, visually demonstrating the inverse relationship between price and quantity demanded.

How do you interpret a demand schedule in economics?

A demand schedule in economics is a table that lists the quantities of a good that consumers are willing to purchase at various prices. Each row in the table represents a price-quantity pair. For example, a demand schedule might show that at a price of 6, the quantity demanded is 1, and at a price of 5, the quantity demanded is 2. By plotting these pairs on a graph, you can visualize the demand curve, which shows the relationship between price and quantity demanded. This helps in understanding consumer behavior and market dynamics.