Analogously point b is dened by the coor dinates 8 4

Info icon This preview shows pages 4–5. Sign up to view the full content.

View Full Document Right Arrow Icon
units above (“north of”) the horizontal axis. Analogously, point B is de±ned by the coor- dinates (8, 4). We call point C (0, 12), where the function cuts (or intersects ) the vertical axis, the vertical intercept , and point H (12, 0), where the function cuts (or intersects ) the horizontal axis, the horizontal intercept . Figure M.1-2(b) gives the signs of the coordinates in all four quadrants of the plane and along the two axes. In the southwest quadrant, for example, both x and y coordi- nates are negative, while in the southeast quadrant, the x coordinate is positive and the y coordinate is negative. [Negative values can have economic signi±cance. For instance, inputs into production are treated as “negative outputs” in economic activity analysis. And a person could say, “I would be prepared to pay a price of minus $2 for a Barry Manilow CD,” meaning that she would accept it only if it were not only free but also accompanied by a toonie.] As an exercise, you may want to plot the following 6 points on a 4-quadrant graph, and then compare them with the corresponding ones in Figure M.1-2(a): (4, –8), (–4, 8), (–4, –8), (8, –4), (–8, 4), and (–8, –4). 1.3 TYPES OF FUNCTIONS We can categorize the functions economists use in several ways. 1.3.1 One basic way relates to whether they are increasing, decreasing, constant, or increas- ing-and-decreasing (or decreasing-and-increasing ) . Figure M.1-3 shows examples of each type. Implicitly, when we speak of an “ increasing function,” we mean that the value of the function ( y ) increases as we move from left to right , to higher values of x. Figure M.1-3(a) depicts what mathematicians call a “ monotonically strictly increasing ” function: English translation, it has a positive slope throughout. In contrast, Figure M.1-3(b) depicts a monotonically strictly decreasing ” function: it has a negative slope throughout. Suppose that a function is never negatively sloped, but that it does have a horizontal portion. We can call it a “ non-decreasing function.” The constant (or horizontal) function in Figure M.1-3(c) can be described as simultaneously non-increasing and non-decreasing. Figure M.1-3(d) shows a (non-monotonic) decreasing-and-increasing function. You have already encountered all of these types of function in your introductory eco- nomics course, and you will see them all again. Figure M.1-3(a) could represent a sup- ply curve or a Total Cost function. Figure M.1-3(b) could be a demand curve, or a (not very well-behaved) production possibilities frontier, or a marginal physical product curve. Figure M.1-3(c) could be a perfectly elastic supply or demand curve, or the long- run average cost curve for an industry characterized by constant costs. And Figure M.1- 3(d) could be a marginal, average variable or average total cost curve. In each case, the mathematical properties of the function remain the same, but the economic interpretations will often be quite different.
Image of page 4

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern