The slope of an iso-revenue line is determined by
A) The ratio of the product to the level of output. B) The ratio of the price of the two products.
C) The ratio of output to the price of the product. D) None of the above
Answer: B
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Appendix: When two or more "independent" variables are highly correlated, then we have:
a. the identification problem b. multicollinearity c. autocorrelation d. heteroscedasticity e. complementary products
If an economy is producing a combination of goods inside its production possibilities curve, it may mean that the nation
a. is overproducing. b. is maximizing its production. c. is under utilizing its resources. d. has no room to grow.
Lower prices are always better for society
a. True b. False Indicate whether the statement is true or false
Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary