Objectives
After reviewing this section you will be able to:
Intersection of Two Lines
Many times in the study of economics we have the situation where there is more than one relationship between the x and y variables. You'll find this type of occurrence often in your study of supply and demand.
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In this graph, there are two relationships between the x and y variables; one represented by the straight line |
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Notice that there are several points on the graph. In all but one instance, the same y value corresponds to different x values on each line. For instance, each line in the graph has a point with a y-value of 3:
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n one case, the two lines have the same (x, y) values simultaneously. This is where the two lines
Examining The Shift of a Line
In your economics class you will be asked to draw conclusions from information presented in graphs where a line has shifted positions. It is important to be able to interpret what is happening on a graph after a shift occurs. You will typically be asked what happens to the intersection point of two lines when one of them shifts. In any situation where you are given a shift in a line:
| Before the Shift | After the Shift |
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| This graph contains the two lines R and S, which intersect at point A (2, 3). Lines shifts to the right. (NOTE: Notice we are using a single letter here to label the lines.) What happens to the intersection of the two lines if one of the lines shifts? | Before attempting to answer this question, we should look at a graph that illustrates this scenario. On the graph below, line S0 is our original line S. Lines S1 represents our new S after it has shifted. The new point of intersection between R and S is now point B (3, 4). |
Compare the points A (2, 3) and B (3, 4) on this graph.
Both the x and y coordinates increased as the line S shifted to the right. This is only one type of shift, a shift to the right. However, the same procedure is used to examine any shift. |
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You are now ready to try a practice problem. If you have already completed the first practice problem for this unit you may wish to try the additional practice.