Question 1

Compared to the early 1950s,today farm output per labor-hour is

Accepted Answer

A) 10 times greater than it was then. 
B) The same as it was then. 
C) 20 times greater than it was then. 
D) 20 percent less than it was then. 
A) 10 times greater than it was then. 
B) The same as it was then. 
C) 20 times greater than it was then. 
D) 20 percent less than it was then.

Question 2

All of the following government actions result in supply restriction except

Accepted Answer

A) Acreage set-asides. 
B) Authorization of marketing orders. 
C) Import quotas. 
D) Subsidies. 
A) Acreage set-asides. 
B) Authorization of marketing orders. 
C) Import quotas. 
D) Subsidies.

Question 3

The market surplus induced by price supports can be eliminated through all of the following except

Accepted Answer

A) Government purchases. 
B) Restrictions on supply. 
C) Export sales. 
D) Increased subsidies. 
A) Government purchases. 
B) Restrictions on supply. 
C) Export sales. 
D) Increased subsidies.

Question 4

The primary focus of U.S.farm policy has been

Accepted Answer

A) Subsidies. 
B) Price supports. 
C) Low-interest loans. 
D) Tax credits for mechanical equipment. 
A) Subsidies. 
B) Price supports. 
C) Low-interest loans. 
D) Tax credits for mechanical equipment.

Question 5

Because the income elasticity of food demand is low,we expect an increase in income to result in

Accepted Answer

A) A significant increase in the quantity of food demanded. 
B) A very slight increase in the quantity of food demanded. 
C) A very slight decrease in the quantity of food demanded. 
D) A significant decrease in the quantity of food demanded. 
A) A significant increase in the quantity of food demanded. 
B) A very slight increase in the quantity of food demanded. 
C) A very slight decrease in the quantity of food demanded. 
D) A significant decrease in the quantity of food demanded.

Question 6

An increase in the value of the U.S.dollar internationally,ceteris paribus,would result in

Accepted Answer

A) Higher revenues for U.S.farmers. 
B) An increase in the dollar value of U.S.farmland. 
C) Lower revenues for U.S.farmers. 
D) An increase in the domestic prices of U.S.farm products. 
A) Higher revenues for U.S.farmers. 
B) An increase in the dollar value of U.S.farmland. 
C) Lower revenues for U.S.farmers. 
D) An increase in the domestic prices of U.S.farm products.

Question 7

The loan rate is a low-interest rate at which farmers may borrow from the federal government on a short-term basis.

Accepted Answer

A) True 
 B)False

Question 8

Acreage set-asides shift the food supply curve to the right and decrease farm prices.

Accepted Answer

A) True 
 B)False

Question 9

An advantage of set-aside programs over price support programs is that they

Accepted Answer

A) Reduce the price of agricultural goods. 
B) Transfer more income to farmers. 
C) Raise the price of agricultural production but do not lead to a surplus of output. 
D) Affect the demand side as well as the supply side of the farm problem. 
A) Reduce the price of agricultural goods. 
B) Transfer more income to farmers. 
C) Raise the price of agricultural production but do not lead to a surplus of output. 
D) Affect the demand side as well as the supply side of the farm problem.

Question 10

If a price support is maintained above the equilibrium price,the result will be a

Accepted Answer

A) Market price that is too low. 
B) Market price equal to the equilibrium price. 
C) Surplus of the product. 
D) Shortage of the product. 
A) Market price that is too low. 
B) Market price equal to the equilibrium price. 
C) Surplus of the product. 
D) Shortage of the product.

Question 11

The "Asian crisis" was responsible for all of the following effects on U.S.agriculture beginning in 1998 except

Accepted Answer

A) Decreasing farm exports to Asia. 
B) Decreasing grain prices. 
C) Decreasing employment in the U.S.farm equipment industry. 
D) Decreasing regulation of farmers. 
A) Decreasing farm exports to Asia. 
B) Decreasing grain prices. 
C) Decreasing employment in the U.S.farm equipment industry. 
D) Decreasing regulation of farmers.

Question 12

The typically price-inelastic demand for agricultural products can be explained by

Accepted Answer

A) Increasing opportunity costs. 
B) Rapidly diminishing marginal utility. 
C) Increasing marginal costs. 
D) Slowly diminishing marginal utility. 
A) Increasing opportunity costs. 
B) Rapidly diminishing marginal utility. 
C) Increasing marginal costs. 
D) Slowly diminishing marginal utility.

Question 13

Government subsidies on the purchase of fertilizer by farmers result in

Accepted Answer

A) Higher fixed costs to farmers. 
B) Lower costs of production and increased output. 
C) Decreased output because variable costs are higher. 
D) No change to fixed or variable costs. 
A) Higher fixed costs to farmers. 
B) Lower costs of production and increased output. 
C) Decreased output because variable costs are higher. 
D) No change to fixed or variable costs.

Question 14

Ceteris paribus,a weaker U.S.dollar does all of the following except

Accepted Answer

A) Raise costs of importing agricultural products from abroad to the United States. 
B) Raise the dollar value of farmland because it increases foreign demand for U.S.agricultural products. 
C) Generate short-run economic profits for farmers because it increases foreign demand for U.S.agricultural products. 
D) Reduce the prices paid by U.S.consumers for foreign-grown farm products. 
A) Raise costs of importing agricultural products from abroad to the United States. 
B) Raise the dollar value of farmland because it increases foreign demand for U.S.agricultural products. 
C) Generate short-run economic profits for farmers because it increases foreign demand for U.S.agricultural products. 
D) Reduce the prices paid by U.S.consumers for foreign-grown farm products.

Question 15

Select the letter of the diagram in Figure 28.1 that best represents the effect of each event on the United States wheat market,ceteris paribus: The federal government decides to no longer purchase wheat from farmers.(See Figure 29.4. )

Accepted Answer

A) a. 
B) b. 
C) c. 
D) d. 
A) a. 
B) b. 
C) c. 
D) d.

Question 16

The Agricultural Adjustment Act of 1933 was based on the belief that farm incomes would improve if

Accepted Answer

A) Parity prices were eliminated. 
B) Acreage set-asides were eliminated. 
C) Parity prices were restored. 
D) Acreage set-asides were reduced. 
A) Parity prices were eliminated. 
B) Acreage set-asides were eliminated. 
C) Parity prices were restored. 
D) Acreage set-asides were reduced.

Question 17

If the price of corn falls by 25 percent on world markets,causing American corn consumption to increase by 10 percent,ceteris paribus,the price elasticity of demand for corn in the United States would be

Accepted Answer

A) 2.50. 
B) 0.75. 
C) 0.40. 
D) 0.30. 
A) 2.50. 
B) 0.75. 
C) 0.40. 
D) 0.30.

Question 18

During the early 1900s,U.S.farm goods were heavily subsidized by the government.

Accepted Answer

A) True 
 B)False

Question 19

Farm support programs most often take the form of price floors,which cause excess demand.

Accepted Answer

A) True 
 B)False

Question 20

Select the letter of the diagram in Figure 28.1 that best represents the effect of each event on the United States wheat market,ceteris paribus: The European Union tightens restrictions on the agricultural products that can be imported from the United States.(See Figure 29.4. )

Accepted Answer

A) a. 
B) b. 
C) c. 
D) d. 
A) a. 
B) b. 
C) c. 
D) d.

Exam 29: The Farm Problem

Compared to the early 1950s,today farm output per labor-hour is

All of the following government actions result in supply restriction except

The market surplus induced by price supports can be eliminated through all of the following except

The primary focus of U.S.farm policy has been

Because the income elasticity of food demand is low,we expect an increase in income to result in

An increase in the value of the U.S.dollar internationally,ceteris paribus,would result in

The loan rate is a low-interest rate at which farmers may borrow from the federal government on a short-term basis.

Acreage set-asides shift the food supply curve to the right and decrease farm prices.

An advantage of set-aside programs over price support programs is that they

If a price support is maintained above the equilibrium price,the result will be a

The "Asian crisis" was responsible for all of the following effects on U.S.agriculture beginning in 1998 except

The typically price-inelastic demand for agricultural products can be explained by

Government subsidies on the purchase of fertilizer by farmers result in

Ceteris paribus,a weaker U.S.dollar does all of the following except

Select the letter of the diagram in Figure 28.1 that best represents the effect of each event on the United States wheat market,ceteris paribus: The federal government decides to no longer purchase wheat from farmers.(See Figure 29.4. )

The Agricultural Adjustment Act of 1933 was based on the belief that farm incomes would improve if

If the price of corn falls by 25 percent on world markets,causing American corn consumption to increase by 10 percent,ceteris paribus,the price elasticity of demand for corn in the United States would be

During the early 1900s,U.S.farm goods were heavily subsidized by the government.

Farm support programs most often take the form of price floors,which cause excess demand.

Select the letter of the diagram in Figure 28.1 that best represents the effect of each event on the United States wheat market,ceteris paribus: The European Union tightens restrictions on the agricultural products that can be imported from the United States.(See Figure 29.4. )

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

National Income Accounting

Unemployment

Inflation

The Business Cycle

Aggregate Demand

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty

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