Question 1

In 1994, the world's trading nations agreed to

Accepted Answer

A) increase export subsidies to reduce world surpluses of farm products. 
B) reduce agricultural subsidies and tariffs on agricultural imports. 
C) eliminate all price supports for farm products. 
D) create an international farm price support system to replace the price support systems of individual countries. 
A) increase export subsidies to reduce world surpluses of farm products. 
B) reduce agricultural subsidies and tariffs on agricultural imports. 
C) eliminate all price supports for farm products. 
D) create an international farm price support system to replace the price support systems of individual countries. B

Question 2

Which of the following statements best describes the demand for agricultural commodities?

Accepted Answer

A) It takes a small decline in price to induce a large increase in the amount of agricultural products demanded. 
B) The marginal utility of additional units of agricultural output diminishes very rapidly. 
C) Small increases in income cause demand to increase by a proportionately larger amount. 
D) When price declines, the resulting substitution effect is very large. 
A) It takes a small decline in price to induce a large increase in the amount of agricultural products demanded. 
B) The marginal utility of additional units of agricultural output diminishes very rapidly. 
C) Small increases in income cause demand to increase by a proportionately larger amount. 
D) When price declines, the resulting substitution effect is very large. B

Question 3

An international agreement reached in 1994 by the world's trading nations provides for

Accepted Answer

A) an increase in export subsidies on agricultural products. 
B) an increase in agricultural price supports. 
C) a reduction of tariffs on agricultural products. 
D) an international research organization designed to discover nonfood uses of agricultural output. 
A) an increase in export subsidies on agricultural products. 
B) an increase in agricultural price supports. 
C) a reduction of tariffs on agricultural products. 
D) an international research organization designed to discover nonfood uses of agricultural output. C

Question 4

The inelastic demand for agricultural products means that relatively a small increase in supply will result in a relatively

Accepted Answer

A) large decrease in farm prices and total revenue for farmers. 
B) small increase in farm prices and total revenue for farmers. 
C) small decrease in farm prices and a relatively large increase in total revenue for farmers. 
D) large increase in farm prices and a relatively small decrease in total revenue for farmers. 
A) large decrease in farm prices and total revenue for farmers. 
B) small increase in farm prices and total revenue for farmers. 
C) small decrease in farm prices and a relatively large increase in total revenue for farmers. 
D) large increase in farm prices and a relatively small decrease in total revenue for farmers.

Question 5

In a purely competitive market, how would a surplus of a product be eliminated?

Accepted Answer

A) The price of the product would decrease. 
B) The price of the product would increase. 
C) The quantity supplied of the product would increase. 
D) The quantity demanded for the product would decrease. 
A) The price of the product would decrease. 
B) The price of the product would increase. 
C) The quantity supplied of the product would increase. 
D) The quantity demanded for the product would decrease.

Question 6

The agricultural price support program in the United States has resulted in

Accepted Answer

A) declining average farm income. 
B) surpluses of price-supported farm commodities. 
C) shortages of price-supported farm commodities. 
D) a gradual migration of people from farms to cities. 
A) declining average farm income. 
B) surpluses of price-supported farm commodities. 
C) shortages of price-supported farm commodities. 
D) a gradual migration of people from farms to cities.

Question 7

Which of the following statements about U.S.agriculture is true as it relates to the past several decades?

Accepted Answer

A) The demand for farm products has declined, the supply of farm products has increased, and the price of farm products has declined. 
B) The demand for farm products has become both more income elastic and more price elastic. 
C) Minimum efficient scale has increased, the prices of farm products have declined, and the number of farms has declined. 
D) The prices of farm products have increased, minimum efficient scale has declined, and the supply of farm products has been stagnant. 
A) The demand for farm products has declined, the supply of farm products has increased, and the price of farm products has declined. 
B) The demand for farm products has become both more income elastic and more price elastic. 
C) Minimum efficient scale has increased, the prices of farm products have declined, and the number of farms has declined. 
D) The prices of farm products have increased, minimum efficient scale has declined, and the supply of farm products has been stagnant.

Question 8

Which of the following best describes the short-run problem faced by farms?

Accepted Answer

A) New technology has increased the productivity of farmers and therefore resulted in declining farm prices and low farm incomes. 
B) The highly inelastic nature of agricultural demand, together with fluctuations in exports of farm goods, has caused small year-to-year fluctuations in farm output to result in highly unstable farm incomes. 
C) The supply of farm products has increased relative to the demand for them, and because demand is inelastic, prices of farm output and farm income have therefore declined. 
D) The demand for farm products has increased relative to their supply, but the elastic nature of agricultural demand has caused these shifts to result in declining farm incomes. 
A) New technology has increased the productivity of farmers and therefore resulted in declining farm prices and low farm incomes. 
B) The highly inelastic nature of agricultural demand, together with fluctuations in exports of farm goods, has caused small year-to-year fluctuations in farm output to result in highly unstable farm incomes. 
C) The supply of farm products has increased relative to the demand for them, and because demand is inelastic, prices of farm output and farm income have therefore declined. 
D) The demand for farm products has increased relative to their supply, but the elastic nature of agricultural demand has caused these shifts to result in declining farm incomes.

Question 9

If turnips are an example of an inferior good, then a decrease in the demand for turnips could be brought about by a(n)

Accepted Answer

A) increase in consumer incomes. 
B) decrease in consumer incomes. 
C) decrease in the price of turnips. 
D) decrease in the price of some other product. 
A) increase in consumer incomes. 
B) decrease in consumer incomes. 
C) decrease in the price of turnips. 
D) decrease in the price of some other product.

Question 10

Farm groups spend considerable amounts of money to maintain and enlarge political support for farm subsidies.This illustrates

Accepted Answer

A) coalitions. 
B) rent-seeking activity. 
C) the special-interest effect. 
D) the voting paradox. 
A) coalitions. 
B) rent-seeking activity. 
C) the special-interest effect. 
D) the voting paradox.

Question 11

If the prices received by farmers increased and the prices paid by farmers also increased, the parity ratio

Accepted Answer

A) will necessarily be unchanged. 
B) may either increase or decrease. 
C) will necessarily increase. 
D) will necessarily decline. 
A) will necessarily be unchanged. 
B) may either increase or decrease. 
C) will necessarily increase. 
D) will necessarily decline.

Question 12

Historically, many aspects of U.S.farm policies had their origins in the

Accepted Answer

A) Agricultural Extension Service Act. 
B) Agricultural Adjustment Act. 
C) Homestead Act. 
D) Land Grant Act. 
A) Agricultural Extension Service Act. 
B) Agricultural Adjustment Act. 
C) Homestead Act. 
D) Land Grant Act.

Question 13

The reason for the long-run decline of the agricultural industry is that the

Accepted Answer

A) increases in the demand for farm products have been greater than the increases in the supply of farm products. 
B) increases in the demand for farm products have been less than the increases in the supply of farm products. 
C) decreases in the demand for farm products have been less than the increases in the supply of farm products. 
D) increases in the demand for farm products have been greater than the decreases in the supply of farm products. 
A) increases in the demand for farm products have been greater than the increases in the supply of farm products. 
B) increases in the demand for farm products have been less than the increases in the supply of farm products. 
C) decreases in the demand for farm products have been less than the increases in the supply of farm products. 
D) increases in the demand for farm products have been greater than the decreases in the supply of farm products.

Question 14

The Freedom to Farm Act of 1996 was designed to encourage farmers to

Accepted Answer

A) seek more subsidies from government. 
B) plant more corn and less soybeans. 
C) plant more wheat and less corn. 
D) respond to market prices. 
A) seek more subsidies from government. 
B) plant more corn and less soybeans. 
C) plant more wheat and less corn. 
D) respond to market prices.

Question 15

The federal government has tried to eliminate agricultural surpluses by

Accepted Answer

A) decreasing supply and demand. 
B) increasing supply and demand. 
C) decreasing supply and increasing demand. 
D) increasing supply and decreasing demanD.Topic: Economics of Farm Policy 
A) decreasing supply and demand. 
B) increasing supply and demand. 
C) decreasing supply and increasing demand. 
D) increasing supply and decreasing demanD.Topic: Economics of Farm Policy

Question 16

Agricultural risk coverage guarantees payments to farmers when the price of their crop falls below a specific value.

Accepted Answer

A) True 
 B)False

Question 17

The major factor contributing to lower prices for many farm products in 1998 and 1999 was

Accepted Answer

A) a rise in the cost of farm equipment. 
B) a drop in the value of farmland prices. 
C) greater demand for food and higher interest costs. 
D) reduced export demand and strong crop production. 
A) a rise in the cost of farm equipment. 
B) a drop in the value of farmland prices. 
C) greater demand for food and higher interest costs. 
D) reduced export demand and strong crop production.

Question 18

The Food, Conservation, and Energy Act of 2008

Accepted Answer

A) ended 60 years of U.S.price supports for American grain crops. 
B) restored the U.S.price support system (for currently grown crops) that was ended in the Freedom to Farm Act of 1996. 
C) ended the "freedom to plant" approach of the Freedom to Farm Act of 1996 and restored acreage allotments. 
D) maintained the "freedom to plant" and "direct-payment" features of the Freedom to Farm Act of 1996, and also provided countercyclical payments and marketing loans to assist farmers. 
A) ended 60 years of U.S.price supports for American grain crops. 
B) restored the U.S.price support system (for currently grown crops) that was ended in the Freedom to Farm Act of 1996. 
C) ended the "freedom to plant" approach of the Freedom to Farm Act of 1996 and restored acreage allotments. 
D) maintained the "freedom to plant" and "direct-payment" features of the Freedom to Farm Act of 1996, and also provided countercyclical payments and marketing loans to assist farmers.

Question 19

Which of the following statements about U.S.farm exports as a percentage of farm output is false?

Accepted Answer

A) It has been on an upward general trend since 1950. 
B) It has been fluctuating, contributing to the instability of the demand for U.S.farm output. 
C) It has been declining since 1950. 
D) It has been hovering around 33 percent in recent years (the period 2008-2014). 
A) It has been on an upward general trend since 1950. 
B) It has been fluctuating, contributing to the instability of the demand for U.S.farm output. 
C) It has been declining since 1950. 
D) It has been hovering around 33 percent in recent years (the period 2008-2014).

Question 20

The increasing relative importance of agricultural exports has increased the instability of the demand for U.S.farm products.

Accepted Answer

A) True 
 B)False

Exam 22: Agriculture: Economics and Policy

In 1994, the world's trading nations agreed to

Which of the following statements best describes the demand for agricultural commodities?

An international agreement reached in 1994 by the world's trading nations provides for

The inelastic demand for agricultural products means that relatively a small increase in supply will result in a relatively

In a purely competitive market, how would a surplus of a product be eliminated?

The agricultural price support program in the United States has resulted in

Which of the following statements about U.S.agriculture is true as it relates to the past several decades?

Which of the following best describes the short-run problem faced by farms?

If turnips are an example of an inferior good, then a decrease in the demand for turnips could be brought about by a(n)

Farm groups spend considerable amounts of money to maintain and enlarge political support for farm subsidies.This illustrates

If the prices received by farmers increased and the prices paid by farmers also increased, the parity ratio

Historically, many aspects of U.S.farm policies had their origins in the

The reason for the long-run decline of the agricultural industry is that the

The Freedom to Farm Act of 1996 was designed to encourage farmers to

The federal government has tried to eliminate agricultural surpluses by

Agricultural risk coverage guarantees payments to farmers when the price of their crop falls below a specific value.

The major factor contributing to lower prices for many farm products in 1998 and 1999 was

The Food, Conservation, and Energy Act of 2008

Which of the following statements about U.S.farm exports as a percentage of farm output is false?

The increasing relative importance of agricultural exports has increased the instability of the demand for U.S.farm products.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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