When income increases by 1%, the quantity demanded of a good decreases by 2%. What is the income elasticity of the good? Is the good normal or inferior? Why?

If all resources were perfectly adaptable for alternative uses, the production possibilities curve would

A) be bowed out. B) be bowed in. C) be a straight line. D) not exist.

Consider an economic model designed to analyze the purchasing decisions of households. An assumption that a household chooses between only two goods would be an example of a

a. simplifying assumption b. critical assumption c. macroeconomic assumption d. financial assumption e. positive assumption