Problem 1: Which of the following is a normative statement?
a. international trade leads to expanded consumption opportunities,
b. higher expenditures on health care will reduce infant mortality rates
c. we would all be better off if we could reduce our dependence on oil imports
d. increased defense spending will lead to higher budget deficits
Problem 2: Which of the following will NOT cause an increase in demand for good X ?
a. A decreases in income if good X is an inferior good
b. An increase in income if good X is a normal good
c. A decrease in the price of good X
d. An increase in consumer's taste for good X
Problem 3: A good is inferior is
a. when income increase, demand remains unchanged
b. when income increases, demand decreases
c. when income increases, demand increases
d. none of the above