Macroeconomics is best defined as the study of

how people make decisions about operating businesses.

the overall operation of the national and global economy.

how the government makes decisions about regulating businesses.

how scarce resources are used by households and businesses.

the study of the interaction of supply and demand.

2.

Mike asked Rachael to go to the beach with him. Rachael knew she should stay home and study for her Macroeconomics exam but felt she could spend some time doing both. In the past, she had always studied about five hours for her exams but today she studied for only two hours. Her normal grade of an A fell to a B. What was the opportunity cost of going to the beach?

The B she received on the exam.

The 2 hours she studied.

The 3 hours she spent at the beach.

The 3 hours she could have spent studying.

The 5 hours she spent at the beach.

3.

When two variables have an inverse relationship, then

if A increases, B increases.

if B increases, A is unchanged.

if A increases, B is unchanged.

the slope of the graph is positive.

the slope of the graph is negative.

4.

When two variables have a direct relationship, then

if A decreases, B increases.

if B decreases, A is unchanged.

if A increases, B is decreases.

the slope of the graph is positive.

the slope of the graph is negative.

5.

The production possibilities curve

graphically illustrates the concept of absolute advantage.

graphically illustrates the concept of scarcity.

allows us to see the concept of absolute advantage.

shows the opportunity cost between all goods and services in an economy.

shows the relationship between absolute and comparative advantage.

6.

A production possibilities curve that is concave or bowed out from the origin represents

increasing opportunity cost.

decreasing opportunity cost.

constant opportunity cost.

zero opportunity cost.

static opportunity cost.