McConnell Microeconomics 17ce Solutions Manual
Chapter 1A - Appendix
Chapter 1 Appendix
APPENDIX DISCUSSION QUESTIONS
1. What is an inverse relationship? How does it graph? What is a direct relationship? How does
it graph? LOA1.1
Answer: Graphs help us visualize relationships between key economic variables in the data. For
example, the relationship between the price of oranges and the number of oranges purchased is
likely to be an inverse relationship. An inverse relationship is one where we observe one variable
increasing and the other variable decreasing as a result (moving in opposite directions). Thus, as
the prices of oranges increase, we would expect to see a decrease in the quantity of oranges
purchased. Graphically, we represent this inverse relationship as follows.
As another example, the relationship between the quality of a textbook and the number of !
textbooks sold is likely to be a direct relationship. A direct relationship is one where we observe
one variable increasing and the other variable increasing as a result (moving in the same
direction). Thus, as the quality of the textbook increases the number of books sold also increases.
Graphically, we represent this direct relationship as follows.
!
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© 2025
, McConnell Microeconomics 17ce Solutions Manual
Chapter 1A - Appendix
2. Describe the graphical relationship between ticket prices and the number of people choosing
to visit amusement parks. Is that relationship consistent with the fact that, historically, park
attendance and ticket prices have both risen? Explain. LOA1.1
Answer: There is likely an inverse relationship between ticket prices and the number of people
visiting amusement parks. As ticket prices increase relative to other goods, people will spend
their income on these other goods. For example, they may decide to go to the movies instead of
visiting the now more expensive amusement park.
The fact that, historically, park attendance and ticket prices have both risen over time does not
change our story. This relationship is most likely the result of a change in demand, not a change
in quantity demanded. The demand schedule for amusement parks has probably shifted to the
right (an increase in demand) over time leading to an increase in attendance and prices.
3. Look back at Figure A1.2, which shows the inverse relationship between ticket prices and
game attendance at Informed University (IU). (a) Interpret the meaning of both the slope and
the intercept. (b) If the slope of the line were steeper, what would that say about the amount
by which ticket sales respond to increases in ticket prices? (c) If the slope of the line stayed
the same but the intercept increased, what can you say about the amount by which ticket sales
respond to increases in ticket prices? LOA1.1
Answer:
Part a: The slope of this relationship tells us how much the price of a ticket must fall to induce
someone to buy an additional ticket. In this case, the slope of -2.5 tells us that the price must fall
by $2.50 to sell one more ticket (or to induce someone to buy one more ticket). The vertical
intercept tells us the price at which no tickets will be sold. Here, this price is $50. Combining
these two components tells us that if the initial price is $50 per ticket and the price falls to $40 per
1A-2
© 2025
, McConnell Microeconomics 17ce Solutions Manual
Chapter 1A - Appendix
ticket, then 4 tickets will be purchased (one for each reduction in price of $2.50, which is the
slope).
Part b: If the slope of this line were steeper this would imply that the price must fall by more than
$2.50 to sell one more ticket. Or, thinking about this in the other direction, a steeper line would
result in a smaller decrease in tickets purchased for a given increase in price. In other words,
ticket sales (purchases) are less responsive to price movements.
Part c: If the vertical intercept increased, this would imply that individuals are willing to purchase
more tickets at every price. This will be an increase in the demand for tickets. This will not affect
the slope or the quantity response to a change in the price of tickets. We still have the relationship
that the price must fall by $2.50 to sell one more ticket (or to induce someone to buy one more
ticket).
APPENDIX REVIEW QUESTIONS
1. Indicate whether each of the following relationships is usually a direct relationship or an
inverse relationship. LOA1.1
a) A sports team's winning percentage and attendance at its home games.
b) Higher temperature and sweater sales.
c) A person's income and how often they shop at discount stores.
d) Higher gasoline prices and kilometers driven in automobiles.
Answer:
Part a: direct relationship because winning reams are typically more popular.
Part b: inverse relationship because as higher temperatures people usually purchase fewer
sweaters
Part c: inverse relationship because as people get richer, they typically shop less often at
discount stores.
Part d: inverse relationship because higher gas prices cause most people to cut back on their
driving.
2. Erin grows pecans. The number of bushels (B) that she can produce depends on the number
of centimetres of rainfall (R) that her orchards get. The relationship is given algebraically as
follows: B = 3,000 + 800R. Match each part of this equation with the correct term. LOA1.1
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© 2025
, McConnell Microeconomics 17ce Solutions Manual
Chapter 1A - Appendix
Answer:
B goes with dependent variable.
3,000 goes with vertical intercept.
800 goes with slope.
R goes with independent variable.
APPENDIX PROBLEMS
1. Graph and label as either direct or indirect the relationships you would expect to find between
(a) the number of centimeters of rainfall per month and the sale of umbrellas, (b) the amount
of tuition and the level of enrollment at a college or university, and (c) the popularity of an
entertainer and the price of her concert tickets. LOA1.1
Answer:
Part a:
!
Feedback: The number of centimeters of rainfall per month and the sale of umbrellas: There is
likely a direct relationship between the number of centimeters of rainfall per month and the sale
of umbrellas (more rain implies more umbrellas).
Part b:
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© 2025
Chapter 1A - Appendix
Chapter 1 Appendix
APPENDIX DISCUSSION QUESTIONS
1. What is an inverse relationship? How does it graph? What is a direct relationship? How does
it graph? LOA1.1
Answer: Graphs help us visualize relationships between key economic variables in the data. For
example, the relationship between the price of oranges and the number of oranges purchased is
likely to be an inverse relationship. An inverse relationship is one where we observe one variable
increasing and the other variable decreasing as a result (moving in opposite directions). Thus, as
the prices of oranges increase, we would expect to see a decrease in the quantity of oranges
purchased. Graphically, we represent this inverse relationship as follows.
As another example, the relationship between the quality of a textbook and the number of !
textbooks sold is likely to be a direct relationship. A direct relationship is one where we observe
one variable increasing and the other variable increasing as a result (moving in the same
direction). Thus, as the quality of the textbook increases the number of books sold also increases.
Graphically, we represent this direct relationship as follows.
!
1A-1
© 2025
, McConnell Microeconomics 17ce Solutions Manual
Chapter 1A - Appendix
2. Describe the graphical relationship between ticket prices and the number of people choosing
to visit amusement parks. Is that relationship consistent with the fact that, historically, park
attendance and ticket prices have both risen? Explain. LOA1.1
Answer: There is likely an inverse relationship between ticket prices and the number of people
visiting amusement parks. As ticket prices increase relative to other goods, people will spend
their income on these other goods. For example, they may decide to go to the movies instead of
visiting the now more expensive amusement park.
The fact that, historically, park attendance and ticket prices have both risen over time does not
change our story. This relationship is most likely the result of a change in demand, not a change
in quantity demanded. The demand schedule for amusement parks has probably shifted to the
right (an increase in demand) over time leading to an increase in attendance and prices.
3. Look back at Figure A1.2, which shows the inverse relationship between ticket prices and
game attendance at Informed University (IU). (a) Interpret the meaning of both the slope and
the intercept. (b) If the slope of the line were steeper, what would that say about the amount
by which ticket sales respond to increases in ticket prices? (c) If the slope of the line stayed
the same but the intercept increased, what can you say about the amount by which ticket sales
respond to increases in ticket prices? LOA1.1
Answer:
Part a: The slope of this relationship tells us how much the price of a ticket must fall to induce
someone to buy an additional ticket. In this case, the slope of -2.5 tells us that the price must fall
by $2.50 to sell one more ticket (or to induce someone to buy one more ticket). The vertical
intercept tells us the price at which no tickets will be sold. Here, this price is $50. Combining
these two components tells us that if the initial price is $50 per ticket and the price falls to $40 per
1A-2
© 2025
, McConnell Microeconomics 17ce Solutions Manual
Chapter 1A - Appendix
ticket, then 4 tickets will be purchased (one for each reduction in price of $2.50, which is the
slope).
Part b: If the slope of this line were steeper this would imply that the price must fall by more than
$2.50 to sell one more ticket. Or, thinking about this in the other direction, a steeper line would
result in a smaller decrease in tickets purchased for a given increase in price. In other words,
ticket sales (purchases) are less responsive to price movements.
Part c: If the vertical intercept increased, this would imply that individuals are willing to purchase
more tickets at every price. This will be an increase in the demand for tickets. This will not affect
the slope or the quantity response to a change in the price of tickets. We still have the relationship
that the price must fall by $2.50 to sell one more ticket (or to induce someone to buy one more
ticket).
APPENDIX REVIEW QUESTIONS
1. Indicate whether each of the following relationships is usually a direct relationship or an
inverse relationship. LOA1.1
a) A sports team's winning percentage and attendance at its home games.
b) Higher temperature and sweater sales.
c) A person's income and how often they shop at discount stores.
d) Higher gasoline prices and kilometers driven in automobiles.
Answer:
Part a: direct relationship because winning reams are typically more popular.
Part b: inverse relationship because as higher temperatures people usually purchase fewer
sweaters
Part c: inverse relationship because as people get richer, they typically shop less often at
discount stores.
Part d: inverse relationship because higher gas prices cause most people to cut back on their
driving.
2. Erin grows pecans. The number of bushels (B) that she can produce depends on the number
of centimetres of rainfall (R) that her orchards get. The relationship is given algebraically as
follows: B = 3,000 + 800R. Match each part of this equation with the correct term. LOA1.1
1A-3
© 2025
, McConnell Microeconomics 17ce Solutions Manual
Chapter 1A - Appendix
Answer:
B goes with dependent variable.
3,000 goes with vertical intercept.
800 goes with slope.
R goes with independent variable.
APPENDIX PROBLEMS
1. Graph and label as either direct or indirect the relationships you would expect to find between
(a) the number of centimeters of rainfall per month and the sale of umbrellas, (b) the amount
of tuition and the level of enrollment at a college or university, and (c) the popularity of an
entertainer and the price of her concert tickets. LOA1.1
Answer:
Part a:
!
Feedback: The number of centimeters of rainfall per month and the sale of umbrellas: There is
likely a direct relationship between the number of centimeters of rainfall per month and the sale
of umbrellas (more rain implies more umbrellas).
Part b:
1A-4
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