Question 1

The implicit price paid by the government for surplus crops taken as collateral for loans to farmers is called

Accepted Answer

A) The interest rate. 
B) A countercyclical payment. 
C) A loan subsidy. 
D) The loan rate. 
A) The interest rate. 
B) A countercyclical payment. 
C) A loan subsidy. 
D) The loan rate.

Question 2

Which of the following is true for the agriculture market?

Accepted Answer

A) The law of demand does not apply. 
B) Individual farmers face a horizontal demand curve. 
C) Individual farmers face a vertical demand curve. 
D) Farmers have market power. 
A) The law of demand does not apply. 
B) Individual farmers face a horizontal demand curve. 
C) Individual farmers face a vertical demand curve. 
D) Farmers have market power.

Question 3

Supply restrictions in the farming industry occur in the form of

Accepted Answer

A) Price supports. 
B) Acreage set-asides. 
C) Countercyclical payments. 
D) Direct income support. 
A) Price supports. 
B) Acreage set-asides. 
C) Countercyclical payments. 
D) Direct income support.

Question 4

In order to continue earning an economic profit,individual farmers must

Accepted Answer

A) Expand their rate of output until marginal cost equals zero. 
B) Charge higher prices than their competitors. 
C) Continue to improve their productivity. 
D) Charge lower prices than their competitors. 
A) Expand their rate of output until marginal cost equals zero. 
B) Charge higher prices than their competitors. 
C) Continue to improve their productivity. 
D) Charge lower prices than their competitors.

Question 5

Which of the following is consistent with farming as a competitive market?

Accepted Answer

A) A large percentage of costs are for advertising. 
B) Negative economic profit in the long run. 
C) Positive economic profit in the long run. 
D) Zero economic profit in the long run. 
A) A large percentage of costs are for advertising. 
B) Negative economic profit in the long run. 
C) Positive economic profit in the long run. 
D) Zero economic profit in the long run.

Question 6

Which of the following agricultural programs reduces agricultural output rather than increasing it?

Accepted Answer

A) Direct income support programs. 
B) Marketing orders. 
C) Farm cost subsidies. 
D) Export sales. 
A) Direct income support programs. 
B) Marketing orders. 
C) Farm cost subsidies. 
D) Export sales.

Question 7

Time lags between the production decision and the resultant harvest contribute to

Accepted Answer

A) Profit. 
B) Loss. 
C) Price instability. 
D) Price stability. 
A) Profit. 
B) Loss. 
C) Price instability. 
D) Price stability.

Question 8

Supply restrictions in the farming industry occur in all of the following forms except

Accepted Answer

A) Acreage set-asides. 
B) Marketing orders. 
C) Import quotas. 
D) Export subsidies. 
A) Acreage set-asides. 
B) Marketing orders. 
C) Import quotas. 
D) Export subsidies.

Question 9

Response lags

Accepted Answer

A) Reduce short-term price instability. 
B) Increase short-term price instability. 
C) Slow the long-term downward trend in farm prices. 
D) Increase the long-term downward trend in farm prices. 
A) Reduce short-term price instability. 
B) Increase short-term price instability. 
C) Slow the long-term downward trend in farm prices. 
D) Increase the long-term downward trend in farm prices.

Question 10

Agricultural prices

Accepted Answer

A) Are being influenced less by international markets than they were 20 years ago. 
B) Are lower because government support programs exist. 
C) Have fallen relative to nonagricultural prices in the long run. 
D) Are very stable since the government supports most agricultural prices. 
A) Are being influenced less by international markets than they were 20 years ago. 
B) Are lower because government support programs exist. 
C) Have fallen relative to nonagricultural prices in the long run. 
D) Are very stable since the government supports most agricultural prices.

Question 11

Bumper crops generally reduce farm incomes.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following helped to maintain a healthy farm sector prior to 1920?

Accepted Answer

A) A decreasing population. 
B) More advanced technology. 
C) Recurrent wars. 
D) Food for peace programs. 
A) A decreasing population. 
B) More advanced technology. 
C) Recurrent wars. 
D) Food for peace programs.

Exam 29: The Farm Problem

The implicit price paid by the government for surplus crops taken as collateral for loans to farmers is called

Which of the following is true for the agriculture market?

Supply restrictions in the farming industry occur in the form of

In order to continue earning an economic profit,individual farmers must

Which of the following is consistent with farming as a competitive market?

Which of the following agricultural programs reduces agricultural output rather than increasing it?

Time lags between the production decision and the resultant harvest contribute to

Supply restrictions in the farming industry occur in all of the following forms except

Response lags

Agricultural prices

Bumper crops generally reduce farm incomes.

Which of the following helped to maintain a healthy farm sector prior to 1920?

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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