Any dynamic phenomenon could be identified as a variable

• Economics studies the relationship of the economic variables
• Various relationships exists among the variables
• Any variable initiated to change the other variable is known as independent variable.
• Changes that have taken place due to the changes of the independent variable is called
  the dependent variable
• In accordance with the behavior of the independent variable ,the quantity of production
  and consumption could be shown by using a schedule.

If X is considered as the independent variable and Y as the dependent variable , changes of Y on X could be shown on a straight line in a graph as follows

• By drawing the impact of the above variables in a diagram, AB straight line could be
  derived
• Relationship between the independent and dependent variables related to the straight line
  could be written as an equation such as:

Y= mx+ c
Y = mx + c in the equation, Y = dependent variable, X = independent variable
M = gradient/ slope, C = intercept

When there is a positive relationship between the independent variable and the dependent variable, the graph has a positive slope and this can be shown as follows.

When there is a negative relationship between independent variable and the dependent
variable, the graph shows a negative slope as follows.

The ratio of the differences in independent variable and the dependent variable is the slope or gradient of the line and it could be computed as follows

Gradient/slope(b) = Difference in the horizontal axis / Difference in the vertical axis
The equation of a straight line : Y =a+ bx is applied in economics in this equation:
Y = dependent variable
a = Intercept
b =Gradient/ slope
x = Independent Variable

Slope of a straight line is constant

• When the independent variable is Zero (0) the value given to the dependent variable is called the intercept (a)
• If the independent and dependent variable of a straight-line, are given the above equation could be developed,
• When the simple equation has been given the graph can be developed from it.