ECN 201 1st Edition Lecture 3Outline of Last Lecture I. Individual Choice – The Heart of EconomicsA. Principles 1 – 4II. Interaction and Individual ChoiceA. Principles 5 – 9III. Economy Wide InteractionA. Principles 10 – 12Outline of Current Lecture I. Two-Variable Graphsa. Straight Lineb. Nonlinear Curvec. Tangent Lined. Calculating AreaII. Time Series GraphIII. Scatter DiagramIV. Pie ChartV. Bar GraphCurrent Lecture1. Two-variable graphs-Used to explain the relationship between two variables-The y variable depends on x-Some graphs have a linear model, and some are on a curve.Linear graph example: Outside temperature vs Number of sodas soldCurve graph example: Life expectancy vs Spending on health care-What do you notice about the “Life expectancy vs Spending on health care” graph?a. The more you spend on healthcare, the longer you’re expected to liveb. After a certain point, you can’t live longer by spending more money on healthcare-How do you interpret the point of the US, Japan, and Cuba?They don’t lie on the best fit curve, and they are outliersStraight Line-The change in y divided by the change in x is the slope-The slope on a straight line is the same all the way throughout the line-Positive slopes: as one variable increases, the other does tooNonlinear CurveThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.-Calculate the slope between two points on the curve in the same way as on the linear graph-Slopes along a curve aren’t the same all the way through; in steeper parts, the slope is higher-Negative slopes: as one variable increases, the other decreases-Know the difference between increasing and decreasing slopes on a curved graph-Four different ways to describe slope of a curve:a. Positive increasing slopeb. Positive decreasing slopec. Negative increasing sloped. Negative decreasing slopeTangent Line-Tangent point: the slope of a line just touching the outside of one point on a curve-Slope at the maximum point of a parabola: 0-Slope at the minimum point of a parabola: 0Calculating Area-Calculating the area below a linear curve (line)Area of a triangle = .5 x base x height2. Time Series Graph-Shows data for one variable’s changes over timeEx. The GDP per capita in the US from 1947 to 2010Interpretation: from 1981 to 1982, the GDP decreasedEx. 2: Life expectancy in the US over timeInterpretation: Women live longer overall, both male and female life expectancies are increasing, and the male’s life expectancy is increasing at a faster rate than females’.3. Scatter Diagram-Graph with dots to represent the relationship between two variables in many cases, plotted on a graph with a best fit lineEx. Carbon dioxide emissions per capita vs GDP per capita in different countries4. Pie Chart-Data in pie charts out of 100%Ex. Graphs showing things like market share, employment opportunities, how much pie a person ate vs didn’t eat5. Bar Graph-Uses bars to show relationship between two variablesEx. Feeling of well-being based on