Which is a normative statement? a. international trade leads to expanded consumption opportunities. b. higher expenditures on health care will reduce infant mortality rates. c. to improve our economic security, we should reduce our dependence on oil imports. d. increased defense spending will lead to higher budget deficits.

The correct answer is "c. To improve our economic security, we should reduce our dependence on oil imports.".

Explanation: Normative economics is responsible for proposing recommendations, policies and actions based on subjective personal judgments or on "what should be." For this it is based on economic theory.

As you can see in the statement "To improve our economic security, we should reduce our dependence on oil imports." The expression "we should" is included indicating that it is a normative declaration.

Total amount of be saved = $180- $178.8 =$1.11

Explanation:

To determine the amount of savings , we will subtract the total inventory cost under the current order size of 500 units from the total cost using the EOQ.

EOQ is the oder quantity that minimizes carrying cost and ordering cost.

Total cost of the current order size of 500 unit

Currently the total cost = Annual ordering cost + Annual holding cost

 Annual ordering cost= (Demand/order size) × Ordering cost per order

                               =(1000/500) × $40 = $80

Carrying cost = holding cost per unit per annum × order size/2

                      = 20% × $2 ×  (500/2)= $100

Total cost =80+ 100 = $180

Total cost using EOQ

EOQ is calculated as follows:

EOQ = (2× Co D)/Ch)^(1/2)

Co- ordering cost Ch - holding cost, D- annual demand

EOQ = √(2× 40×1000/20%×2

EOQ = 447.21 units

Total cost of inventory

Ordering cost = (1000/447.21)×40 = 89.4427191

Holding cost =  (447.21/2) * 20% × 2=  89.4427191

Total cost =89.44 + 89.44 = 178.8

Total amount of be saved = $180- $178.8 =$1.11456