At the beginning of the recession of 2007-2009, real GDP in the United States was ________ potential GDP, and in June 2009, real GDP was ________ potential GDP

Nobody needs soda. So why do people drink it?

A) They deny the data and believe they really do need soda. B) The expected additional benefits of another soda outweigh the additional costs. C) There are no substitutes for soda. D) Soda is a good for the people who consume it, and therefore they will drink it at any price.

A firm is employing capital and labor such that the marginal product of capital is 80 and the marginal product of labor is 20

If the price of a unit of capital is $30 and the price of a unit of labor is $15, is the firm minimizing its costs? If not, can you recommend a change for the firm to make in its relative amounts of labor and capital used? Explain.