Question 1

The relative price inelasticity of demand for agricultural products has resulted in

Accepted Answer

A) prices fluctuating more in agriculture than in other industries. 
B) prices fluctuating less in agriculture than in other industries. 
C) higher prices for agricultural products. 
D) lower prices for agricultural products. 
A) prices fluctuating more in agriculture than in other industries. 
B) prices fluctuating less in agriculture than in other industries. 
C) higher prices for agricultural products. 
D) lower prices for agricultural products.

Question 2

Because the demand for agricultural products is price-inelastic, price support programs tend to

Accepted Answer

A) increase farm income. 
B) decrease farm income. 
C) have no effect upon farm income. 
D) cause farm incomes to fluctuate more than they would without such programs. 
A) increase farm income. 
B) decrease farm income. 
C) have no effect upon farm income. 
D) cause farm incomes to fluctuate more than they would without such programs.

Question 3

An increase in the supply of farm products relative to the demand for them tends to cause farm incomes to decline.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements describes how a price-change in a purely competitive market would eliminate the surplus of an agricultural commodity?

Accepted Answer

A) As the price increases, the quantity demanded increases while the quantity supplied decreases. 
B) As the price increases, the quantity demanded decreases while the quantity supplied increases. 
C) As the price decreases, the quantity demanded increases while the quantity supplied decreases. 
D) As the price decreases, the quantity demanded decreases while the quantity supplied increases. 
A) As the price increases, the quantity demanded increases while the quantity supplied decreases. 
B) As the price increases, the quantity demanded decreases while the quantity supplied increases. 
C) As the price decreases, the quantity demanded increases while the quantity supplied decreases. 
D) As the price decreases, the quantity demanded decreases while the quantity supplied increases.

Question 5

The price elasticity of demand for food tends to be

Accepted Answer

A) higher in richer nations. 
B) lower in richer nations. 
C) the same in rich and poor nations. 
D) unrelated to per capita wealth. 
A) higher in richer nations. 
B) lower in richer nations. 
C) the same in rich and poor nations. 
D) unrelated to per capita wealth.

Question 6

Price supports

Accepted Answer

A) decrease pollution because participants must practice organic farming. 
B) neither increase nor decrease environmental pollution. 
C) increase pollution because supports encourage the cultivation of marginal land and the use of more pesticides and fertilizers. 
D) discourage rent-seeking activity. 
A) decrease pollution because participants must practice organic farming. 
B) neither increase nor decrease environmental pollution. 
C) increase pollution because supports encourage the cultivation of marginal land and the use of more pesticides and fertilizers. 
D) discourage rent-seeking activity.

Question 7

The price parity concept, which is a cornerstone of U.S.agricultural policy, was established by the

Accepted Answer

A) Agricultural Income Act of 1914. 
B) Agricultural Adjustment Act of 1933. 
C) Obama administration. 
D) Reagan administration. 
A) Agricultural Income Act of 1914. 
B) Agricultural Adjustment Act of 1933. 
C) Obama administration. 
D) Reagan administration.

Question 8

The government's promotion of greater production and use of corn-based ethanol was intended to

Accepted Answer

A) reduce the price of ethanol-blended gasoline. 
B) bolster the demand for corn. 
C) reduce the surplus supply of corn. 
D) increase the importation of ethanol. 
A) reduce the price of ethanol-blended gasoline. 
B) bolster the demand for corn. 
C) reduce the surplus supply of corn. 
D) increase the importation of ethanol.

Question 9

Over time, technological change has

Accepted Answer

A) reduced both the price elasticity and income elasticity of the demand for farm products. 
B) reduced the minimum efficient scale of production in agriculture and increased the prices of farm products. 
C) increased both price elasticity and income elasticity of the demand for farm products. 
D) increased the minimum efficient scale of production in agriculture and reduced the prices of farm products. 
A) reduced both the price elasticity and income elasticity of the demand for farm products. 
B) reduced the minimum efficient scale of production in agriculture and increased the prices of farm products. 
C) increased both price elasticity and income elasticity of the demand for farm products. 
D) increased the minimum efficient scale of production in agriculture and reduced the prices of farm products.

Question 10

What is the reason why large, short-run declines in farm prices do not significantly reduce farm production in the short run?

Accepted Answer

A) Farmers' variable costs are high compared with their fixed costs. 
B) Farmers' fixed costs are high compared with their variable costs. 
C) Farmers' prices received are greater than prices paid for agricultural products. 
D) Farmers' prices paid are greater than prices received for agricultural products. 
A) Farmers' variable costs are high compared with their fixed costs. 
B) Farmers' fixed costs are high compared with their variable costs. 
C) Farmers' prices received are greater than prices paid for agricultural products. 
D) Farmers' prices paid are greater than prices received for agricultural products.

Exam 22: Agriculture: Economics and Policy

The relative price inelasticity of demand for agricultural products has resulted in

Because the demand for agricultural products is price-inelastic, price support programs tend to

An increase in the supply of farm products relative to the demand for them tends to cause farm incomes to decline.

Which of the following statements describes how a price-change in a purely competitive market would eliminate the surplus of an agricultural commodity?

The price elasticity of demand for food tends to be

Price supports

The price parity concept, which is a cornerstone of U.S.agricultural policy, was established by the

The government's promotion of greater production and use of corn-based ethanol was intended to

Over time, technological change has

What is the reason why large, short-run declines in farm prices do not significantly reduce farm production in the short run?

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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