AP_Krugman_Textbook

outside temperature the x-variable and number of sodas sold the y-variable. The solid
horizontal line in the graph is called the horizontal axisor x-axis,and values of the
x-variable—outside temperature—are measured along it. Similarly, the solid vertical line
in the graph is called the vertical axisor y-axis,and values of the y-variable—number
of sodas sold—are measured along it. At the origin,the point where the two axes meet,
each variable is equal to zero. As you move rightward from the origin along the x-axis,
values of the x-variable are positive and increasing. As you move up from the origin
along the y-axis, values of the y-variable are positive and increasing.
You can plot each of the five points Athrough Eon this graph by using a pair of
numbers—the values that the x-variable and the y-variable take on for a given point. In
Figure A.1, at point C,the x-variable takes on the value 40 and the y-variable takes on
the value 30. You plot point Cby drawing a line straight up from 40 on the x-axis and a
horizontal line across from 30 on the y-axis. We write point Cas (40, 30). We write the
origin as (0, 0).
Looking at point Aand point Bin Figure A.1, you can see that when one of the vari-
ables for a point has a value of zero, it will lie on one of the axes. If the value of the x-
variable is zero, the point will lie on the vertical axis, like point A. If the value of the
y-variable is zero, the point will lie on the horizontal axis, like point B.
Most graphs that depict relationships between two economic variables represent a
causal relationship,a relationship in which the value taken by one variable directly
influences or determines the value taken by the other variable. In a causal relation-
ship, the determining variable is called the independent variable;the variable it de-
termines is called the dependent variable.In our example of soda sales, the outside
temperature is the independent variable. It directly influences the number of sodas
that are sold, which is the dependent variable in this case.

appendix Graphs in Economics 35

Section I Basic Economic Concepts

0 10 20 30 40 50 60 70 80 90

Outside temperature (degrees Fahrenheit)

70

60

50

40

30

20

10

Number of

sodas sold

D

(60, 50)

C

(40, 30)

A (0, 10)

B (10, 0)

E

(80, 70)

y

x

x-variable is

the independent

variable.

Horizontal axis

or x-axis

Vertical axis or y-axis

0

10

40

60

80

°F

Point

x-variable:

Outside

temperature

y-variable:

Number of

sodas sold

A

B

C

D

E

10

0

30

50

70

y-variable

is the

dependent

variable.

Origin

(0, 0)

Plotting Points on a Two-Variable Graph

The data from the table are plotted where outside temper-

ature (the independent variable) is measured along the

horizontal axis and number of sodas sold (the dependent

variable) is measured along the vertical axis. Each of the

five combinations of temperature and sodas sold is repre-

sented by a point: A, B, C, D,and E.Each point in the graph

is identified by a pair of values. For example, point Ccorre-

sponds to the pair (40, 30)—an outside temperature of

40 °F (the value of the x-variable) and 30 sodas sold (the

value of the y-variable).

figure A.1