ICA

1
ICA 6

• Question One
• The price of a complement good (from the
  consumers perspective) decreases. How will this
  change impact the equilibrium quantity in the
  market?
• a. Increase b. Decrease
• c. Unchanged
• d. The change in quantity is ambiguous.

2
ICA 6

• Question Two
• The price of a good producers could be producing
  increases. How will this change impact the
  equilibrium price in the market?
• a. Increase b. Decrease
• c. Unchanged
• d. The change in price is ambiguous.

3
ICA 6

• Question Three
• Incomes increase in a market of a normal good.
  Additionally, the number of producers of the good
  decline. How will these two changes impact the
  equilibrium price in the market?
• a. Increase b. Decrease
• c. Unchanged
• d. The change in price is ambiguous.

4
ICA 6

• Question Four
• The price of a substitute good (from the
  consumers perspective) increases. Additionally,
  the cost of producing a good increases. How will
  these two changes impact the equilibrium price in
  the market?
• a. Increase b. Decrease
• c. Unchanged
• d. The change in price is ambiguous.

5
ICA 6

• Question Five
• The price of a complement good (from the
  consumers perspective) increases. Additionally,
  the cost of producing the good decreases. How
  will these two changes impact the equilibrium
  quantity in the market?
• a. Increase b. Decrease
• c. Unchanged
• d. The change in quantity is ambiguous.

6
ICA 7

• Question One
• The government imposes a price ceiling on a
  product. Such a policy, if effective, will
  create a
• a. shortage. b. surplus.

7
ICA 7

• Question Two
• The government imposes a price floor on a
  product. Such a policy, if effective, will
  create a
• a. shortage. b. surplus.

8
ICA 7

• Question Three
• Which of the following policies will force
  society to allocate goods by a method other than
  the price mechanism?
• a. A price ceiling
• b. A price floor

9
ICA 7

• Question Four
• Which of the following groups benefit from rent
  controls?
• a. People who are searching for apartments.
• b. People who own apartment buildings.
• c. People who are currently living in
• rent-controlled apartments.

10
ICA 7

• Question Five
• Which of the following are costs associated with
  rent controls?
• a. People without housing face higher costs in
  finding a home.
• b. Maintenance of existing apartments
• declines.
• c. Building of new apartments declines.
• d. All of the above are costs associated with
  this policy.

11
ICA 8

• Question One
• The number of buyers in a market increase. In
  addition, the price of a good related in
  production (i.e. a good producers could be
  producing) falls. How will these two changes
  impact the equilibrium price in the market?
• a. Increase b. Decrease
• c. Unchanged
• d. The change in price is ambiguous.

12
ICA 8

• Question Two
• The price of a factor of production has fallen.
  How will this change impact the equilibrium
  quantity in the market?
• a. Increase b. Decrease
• c. Unchanged
• d. The change in price is ambiguous.

13
ICA 8

• Question Three
• The law of diminishing returns, according to
  lecture, states that as a variable input is
  added, holding all else constant, eventually
• a. output will decline.
• b. output will increase
• c. the rate of increase in output will fall.
• d. the rate of increase in output will rise.

14
ICA 8

• Question Four
• A firm observes that wages are currently greater
  than marginal revenue product. Given this
  observation, the firm will
• a. increase its employment of labor.
• b. decrease its employment of labor.
• c. increase the wage paid to workers.
• d. decrease the wage paid to workers.

15
ICA 8

• Question Five
• A researcher finds that workers work more as
  wages rise. Such a result is consistent with the
  
• a. substitution effect.
• b. income effect.

16
ICA 9

• Question One
• According to lecture, what is the general
  relationship between productivity and wages in
  the United States?
• a. Wages tend increase much faster than
• productivity.
• b. Wages tend to increase much slower than
  productivity.
• c. Wages tend to rise as fast (or as slow) as
  productivity.

17
ICA 9

• Question two
• If demand for labor increases in a market, what
  will happen to wages?
• a. Wages will rise.
• b. Wages will fall.
• c. Wages will be unchanged.

18
ICA 9

• Question Three
• What is the current value of the federal minimum
  wage?
• a. 6.75
• b. 6.15
• c. 5.75
• d. 5.15

19
ICA 9

• Question Four
• In which decade did the federal minimum wage
  have the highest level of purchasing power?
• a. 1960s
• b. 1980s
• c. 1990s
• d. 2000s

20
ICA 9

• Question Five
• According to lecture, which of the following
  arguments for or against the minimum wage is
  consistent with the empirical evidence?
• a. The minimum wage is primarily paid to people
  living in poverty.
• b. Raising the minimum wage dramatically
  increases the rate of unemployment.
• c. The minimum wage is sufficient to raise a
  person out of poverty.
• d. None of the above.

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