Question 1

Because the demand for agricultural products is highly price inelastic, a modest increase in supply will cause

Accepted Answer

A) relatively large declines in farm prices and incomes. 
B) relatively large increases in farm prices and incomes. 
C) a small decline in farm prices, but an increase in farm incomes. 
D) a large decline in farm prices, but an increase in farm incomes. 
A) relatively large declines in farm prices and incomes. 
B) relatively large increases in farm prices and incomes. 
C) a small decline in farm prices, but an increase in farm incomes. 
D) a large decline in farm prices, but an increase in farm incomes.

Question 2

In the last six-plus decades (1950-2015) farm employment in the U.S.has been

Accepted Answer

A) increasing both in absolute numbers and as a proportion of the total employment. 
B) increasing in absolute numbers, but declining as a proportion of the total employment. 
C) decreasing both in absolute numbers and as a proportion of the total employment. 
D) decreasing in absolute numbers, but rising as a proportion of the total employment. 
A) increasing both in absolute numbers and as a proportion of the total employment. 
B) increasing in absolute numbers, but declining as a proportion of the total employment. 
C) decreasing both in absolute numbers and as a proportion of the total employment. 
D) decreasing in absolute numbers, but rising as a proportion of the total employment.

Question 3

The concept of parity has provided a rationale for government price supports for farm products.

Accepted Answer

A) True 
 B)False

Question 4

Comparing an acreage allotment program versus a taxpayer-subsidized price-support program, the acreage allotment program

Accepted Answer

A) and the price-support program have similar costs to the taxpayers. 
B) imposes a smaller cost on the taxpayers. 
C) imposes a larger cost on the taxpayers. 
D) does not impose a cost on the consumers. 
A) and the price-support program have similar costs to the taxpayers. 
B) imposes a smaller cost on the taxpayers. 
C) imposes a larger cost on the taxpayers. 
D) does not impose a cost on the consumers.

Question 5

Which of the following statements is correct?

Accepted Answer

A) The price support program hastened the exodus of resources from agriculture. 
B) The main beneficiaries of government price support assistance were the very low income farmers. 
C) If the demand for agricultural products is inelastic, a relatively small decrease in supply will increase gross farm incomes. 
D) There is a misallocation of resources in rural America because of absolute and relative increases in the size of the farm population. 
A) The price support program hastened the exodus of resources from agriculture. 
B) The main beneficiaries of government price support assistance were the very low income farmers. 
C) If the demand for agricultural products is inelastic, a relatively small decrease in supply will increase gross farm incomes. 
D) There is a misallocation of resources in rural America because of absolute and relative increases in the size of the farm population.

Question 6

If the prices of agricultural products fall, then the quantities demanded usually

Accepted Answer

A) do not increase by much because the price-changes are often small. 
B) do not increase by much because there are no close substitutes. 
C) increase significantly because the products satisfy basic needs. 
D) increase significantly because the products have no close substitutes and are necessities. 
A) do not increase by much because the price-changes are often small. 
B) do not increase by much because there are no close substitutes. 
C) increase significantly because the products satisfy basic needs. 
D) increase significantly because the products have no close substitutes and are necessities.

Question 7

When a buyer or seller of an agricultural commodity takes action to protect against a future change in the value of the commodity, then the buyer or seller is

Accepted Answer

A) logrolling. 
B) hedging. 
C) allotting. 
D) bolstering. 
A) logrolling. 
B) hedging. 
C) allotting. 
D) bolstering.

Question 8

The following factors have boosted farm income per farm household in the U.S., except

Accepted Answer

A) consolidation of farms. 
B) outmigration from farming. 
C) stronger, or appreciating, dollar. 
D) significant government subsidies. 
A) consolidation of farms. 
B) outmigration from farming. 
C) stronger, or appreciating, dollar. 
D) significant government subsidies.

Question 9

If prices received by farmers decline and prices paid by farmers increase, the parity ratio will decline.

Accepted Answer

A) True 
 B)False

Question 10

Because the demand for food is relatively price inelastic, what effects would you expect to see as a result of technological advances that reduce the cost of food production?

Accepted Answer

A) Food prices would rise, but farm incomes would decline. 
B) Food prices would rise and farm incomes would rise. 
C) Food prices would decline and farm incomes would decline. 
D) Food prices would decline, but farm incomes would rise. 
A) Food prices would rise, but farm incomes would decline. 
B) Food prices would rise and farm incomes would rise. 
C) Food prices would decline and farm incomes would decline. 
D) Food prices would decline, but farm incomes would rise.

Question 11

Based on World Bank data for 2011-2014, which of the following countries has the highest percentage of its labor force still in agriculture?

Accepted Answer

A) Russia 
B) Brazil 
C) France 
D) Japan 
A) Russia 
B) Brazil 
C) France 
D) Japan

Question 12

To get the U.S.Senate to pass a farm bill, a U.S.senator from a farm state asks for the support of a U.S.senator from an urban state.The urban-state senator agrees to support the bill, if in return the farm-state senator supports a bill for a mass transit project.This situation is an example of

Accepted Answer

A) the paradox of voting. 
B) rent-seeking behavior. 
C) political logrolling. 
D) the median voter model. 
A) the paradox of voting. 
B) rent-seeking behavior. 
C) political logrolling. 
D) the median voter model.

Question 13

Incomes of U.S.farmers tend to be boosted by

Accepted Answer

A) very good harvests on farms abroad. 
B) economic weakness in Europe and Southeast Asia. 
C) increased protectionism in farm policies abroad. 
D) a depreciation of the U.S.dollar. 
A) very good harvests on farms abroad. 
B) economic weakness in Europe and Southeast Asia. 
C) increased protectionism in farm policies abroad. 
D) a depreciation of the U.S.dollar.

Question 14

The fundamental cause of agricultural price and income instability in the United States has been a(n)

Accepted Answer

A) lack of foreign demand for U.S.agricultural products. 
B) lack of efficiency in the farm sector of the American economy. 
C) underallocation of resources to the farm sector of the economy relative to that of the nonfarm sector. 
D) overallocation of resources to the farm sector of the economy relative to that of the nonfarm sector. 
A) lack of foreign demand for U.S.agricultural products. 
B) lack of efficiency in the farm sector of the American economy. 
C) underallocation of resources to the farm sector of the economy relative to that of the nonfarm sector. 
D) overallocation of resources to the farm sector of the economy relative to that of the nonfarm sector.

Question 15

The Food, Conservation, and Energy Act of 2008 provided farm subsidies in the form of direct payments, countercyclical payments, and marketing loans to farmers.

Accepted Answer

A) True 
 B)False

Question 16

If the demand for an agricultural product is inelastic, a bumper crop will

Accepted Answer

A) raise price and decrease total revenues. 
B) raise price and increase total revenues. 
C) lower price and decrease total revenues. 
D) lower price and increase total revenues. 
A) raise price and decrease total revenues. 
B) raise price and increase total revenues. 
C) lower price and decrease total revenues. 
D) lower price and increase total revenues.

Question 17

Farmers, though a small proportion of the population, can impose a large total cost to taxpayers in the form of agricultural subsidies because the average cost imposed on each individual taxpayer is small and not given much attention by a large number of taxpayers.

Accepted Answer

A) True 
 B)False

Question 18

Recent government policies to provide price and income subsidies in agriculture are economically inefficient because they

Accepted Answer

A) increase the interest costs for farmers. 
B) maintain high production levels for farm products. 
C) limit the adoption of new technology to increase output. 
D) give control over production and prices to a few, large agribusinesses. 
A) increase the interest costs for farmers. 
B) maintain high production levels for farm products. 
C) limit the adoption of new technology to increase output. 
D) give control over production and prices to a few, large agribusinesses.

Question 19

Technological advances have occurred throughout the history of agriculture, resulting in higher productivity but lower incomes to farmers.

Accepted Answer

A) True 
 B)False

Question 20

When fixed costs are high relative to variable costs, producers will tend to

Accepted Answer

A) continue producing in the short run even if they incur some losses. 
B) quickly shut down in the short run whenever they see losses. 
C) only produce in the short run as long as the product price is lower than their average variable costs. 
D) produce in the short run even if the product price is lower than their average fixed costs. 
A) continue producing in the short run even if they incur some losses. 
B) quickly shut down in the short run whenever they see losses. 
C) only produce in the short run as long as the product price is lower than their average variable costs. 
D) produce in the short run even if the product price is lower than their average fixed costs.

Exam 22: Agriculture: Economics and Policy

Because the demand for agricultural products is highly price inelastic, a modest increase in supply will cause

In the last six-plus decades (1950-2015) farm employment in the U.S.has been

The concept of parity has provided a rationale for government price supports for farm products.

Comparing an acreage allotment program versus a taxpayer-subsidized price-support program, the acreage allotment program

Which of the following statements is correct?

If the prices of agricultural products fall, then the quantities demanded usually

When a buyer or seller of an agricultural commodity takes action to protect against a future change in the value of the commodity, then the buyer or seller is

The following factors have boosted farm income per farm household in the U.S., except

If prices received by farmers decline and prices paid by farmers increase, the parity ratio will decline.

Because the demand for food is relatively price inelastic, what effects would you expect to see as a result of technological advances that reduce the cost of food production?

Based on World Bank data for 2011-2014, which of the following countries has the highest percentage of its labor force still in agriculture?

To get the U.S.Senate to pass a farm bill, a U.S.senator from a farm state asks for the support of a U.S.senator from an urban state.The urban-state senator agrees to support the bill, if in return the farm-state senator supports a bill for a mass transit project.This situation is an example of

Incomes of U.S.farmers tend to be boosted by

The fundamental cause of agricultural price and income instability in the United States has been a(n)

The Food, Conservation, and Energy Act of 2008 provided farm subsidies in the form of direct payments, countercyclical payments, and marketing loans to farmers.

If the demand for an agricultural product is inelastic, a bumper crop will

Farmers, though a small proportion of the population, can impose a large total cost to taxpayers in the form of agricultural subsidies because the average cost imposed on each individual taxpayer is small and not given much attention by a large number of taxpayers.

Recent government policies to provide price and income subsidies in agriculture are economically inefficient because they

Technological advances have occurred throughout the history of agriculture, resulting in higher productivity but lower incomes to farmers.

When fixed costs are high relative to variable costs, producers will tend to

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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