Question 1

Price support programs for agricultural products tend to cause shortages of these products.

Accepted Answer

A) True 
 B)False

Question 2

One consequence of the long-run problem faced by farms has been a

Accepted Answer

A) rapid increase in the price of farm output. 
B) massive exit of workers from agriculture to other sectors of the economy. 
C) smaller average farm size. 
D) reduction in U.S.exports of farm products. 
A) rapid increase in the price of farm output. 
B) massive exit of workers from agriculture to other sectors of the economy. 
C) smaller average farm size. 
D) reduction in U.S.exports of farm products.

Question 3

The demand for most agricultural products is

Accepted Answer

A) elastic with respect to price but inelastic with respect to income. 
B) inelastic with respect to price but elastic with respect to income. 
C) elastic with respect to both price and income. 
D) inelastic with respect to both price and income. 
A) elastic with respect to price but inelastic with respect to income. 
B) inelastic with respect to price but elastic with respect to income. 
C) elastic with respect to both price and income. 
D) inelastic with respect to both price and income.

Question 4

Which of the following illustrates the basic idea of "parity" as a cornerstone of U.S.agricultural policy?

Accepted Answer

A) The price of corn per bushel should be held constant. 
B) A bushel of corn should exchange for more of all goods today than previously because farm incomes have declined. 
C) If a bushel of corn exchanged for a pair of pants at a previous time, the same rate of exchange should prevail today. 
D) If a bushel of corn exchanged for a pair of pants at a previous time, the rate of exchange today should be two bushels of corn for one pair of pants since productivity in farming has increased faster than in pants manufacturing. 
A) The price of corn per bushel should be held constant. 
B) A bushel of corn should exchange for more of all goods today than previously because farm incomes have declined. 
C) If a bushel of corn exchanged for a pair of pants at a previous time, the same rate of exchange should prevail today. 
D) If a bushel of corn exchanged for a pair of pants at a previous time, the rate of exchange today should be two bushels of corn for one pair of pants since productivity in farming has increased faster than in pants manufacturing.

Question 5

Which of the following statements is correct?

Accepted Answer

A) The parity ratio has not exceeded 100 in the 20th or 21st century. 
B) An increase in prices paid by farmers relative to prices received by farmers will increase the parity ratio. 
C) The parity ratio has generally been greater than 100 in the past four decades. 
D) The parity ratio has generally declined over the past five decades. 
A) The parity ratio has not exceeded 100 in the 20th or 21st century. 
B) An increase in prices paid by farmers relative to prices received by farmers will increase the parity ratio. 
C) The parity ratio has generally been greater than 100 in the past four decades. 
D) The parity ratio has generally declined over the past five decades.

Question 6

The Agricultural Act of 2014

Accepted Answer

A) ended 60 years of U.S.price supports for American grain crops. 
B) eliminated the marketing loan program that was established by the Food, Conservation, and Energy Act of 2008. 
C) ended the "freedom to plant" approach of the Freedom to Farm Act of 1996 and restored acreage allotments. 
D) added two new crop insurance programs, agricultural risk coverage and price loss coverage. 
A) ended 60 years of U.S.price supports for American grain crops. 
B) eliminated the marketing loan program that was established by the Food, Conservation, and Energy Act of 2008. 
C) ended the "freedom to plant" approach of the Freedom to Farm Act of 1996 and restored acreage allotments. 
D) added two new crop insurance programs, agricultural risk coverage and price loss coverage.

Question 7

Which of the following would, other things equal, reduce the demand for U.S.farm products?

Accepted Answer

A) poorer crops abroad 
B) strong economic growth abroad 
C) improved trade relations with China and Russia 
D) appreciation of the U.S.dollar 
A) poorer crops abroad 
B) strong economic growth abroad 
C) improved trade relations with China and Russia 
D) appreciation of the U.S.dollar

Question 8

Between 2002 and 2011, U.S.farmers received yearly direct subsidies from the federal government averaging about

Accepted Answer

A) $2 billion. 
B) $10 billion. 
C) $20 billion. 
D) $40 billion. 
A) $2 billion. 
B) $10 billion. 
C) $20 billion. 
D) $40 billion.

Question 9

Which of the following statements is correct?

Accepted Answer

A) Price supports may induce either an underallocation or an overallocation of resources to farm products. 
B) Supported prices have no effect on the allocation of resources to farm products. 
C) Supported prices induce an underallocation of resources to farm products. 
D) Price supports induce an overallocation of resources to farm products. 
A) Price supports may induce either an underallocation or an overallocation of resources to farm products. 
B) Supported prices have no effect on the allocation of resources to farm products. 
C) Supported prices induce an underallocation of resources to farm products. 
D) Price supports induce an overallocation of resources to farm products.

Question 10

A source of demand volatility for agricultural products is

Accepted Answer

A) the strict application of "100 percent parity" by the Department of Agriculture. 
B) a sharp fluctuation in foreign demand for U.S.farm products. 
C) the large grain harvest which resulted from excellent weather. 
D) the increasing mechanization of farms. 
A) the strict application of "100 percent parity" by the Department of Agriculture. 
B) a sharp fluctuation in foreign demand for U.S.farm products. 
C) the large grain harvest which resulted from excellent weather. 
D) the increasing mechanization of farms.

Question 11

What has been the effect of the outmigration of people from farming and the consolidation of smaller farms into larger ones on net farm income per farm household?

Accepted Answer

A) It is now far greater than nonfarm income. 
B) It is now significantly less than nonfarm income. 
C) It has decreased relative to nonfarm incomes. 
D) It has increased relative to nonfarm incomes. 
A) It is now far greater than nonfarm income. 
B) It is now significantly less than nonfarm income. 
C) It has decreased relative to nonfarm incomes. 
D) It has increased relative to nonfarm incomes.

Question 12

The price of a certain farm product was $1.25 in the base period when the parity ratio was 100.If the index of prices paid by farmers is now at 140, then the parity price of this farm product today should be

Accepted Answer

A) $0.90. 
B) $1.50. 
C) $1.75. 
D) $2.00. 
A) $0.90. 
B) $1.50. 
C) $1.75. 
D) $2.00.

Question 13

The Food, Conservation, and Energy Act of 2008 provided three main forms of cash commodity subsidies, including the following, except

Accepted Answer

A) direct payments. 
B) cash rebates. 
C) countercyclical payments. 
D) marketing loans. 
A) direct payments. 
B) cash rebates. 
C) countercyclical payments. 
D) marketing loans.

Question 14

In 2015, Farmer Lactoseâ€™s dairy farm lost money.Under the Agricultural Act of 2014 dairy margin protection program, which of the following events would have triggered payments to Farmer Lactose?

Accepted Answer

A) only the price of milk falling too low 
B) only the price of feed rising too high 
C) either the price of milk falling too low or the price of feed rising too high 
D) if the collective revenue of all dairy farmers in the county fell too low 
A) only the price of milk falling too low 
B) only the price of feed rising too high 
C) either the price of milk falling too low or the price of feed rising too high 
D) if the collective revenue of all dairy farmers in the county fell too low

Question 15

The Food, Conservation, and Energy Act of 2008 provided three types of agricultural subsidies: direct payments, countercyclical payments, and marketing loans.

Accepted Answer

A) True 
 B)False

Question 16

Farm policy in the United States over the past eight decades has been designed primarily to

Accepted Answer

A) shift resources from the farm sector to the nonfarm sector. 
B) reduce monopoly in the farm sector. 
C) enhance and stabilize farm prices and income. 
D) produce a strategic reserve of food. 
A) shift resources from the farm sector to the nonfarm sector. 
B) reduce monopoly in the farm sector. 
C) enhance and stabilize farm prices and income. 
D) produce a strategic reserve of food.

Question 17

One reason for the year-to-year instability of agricultural product demand is the

Accepted Answer

A) high price-elasticity for agricultural products. 
B) fluctuations in weather patterns. 
C) declining role of technological progress in agriculture. 
D) greater dependence on exports to foreign markets. 
A) high price-elasticity for agricultural products. 
B) fluctuations in weather patterns. 
C) declining role of technological progress in agriculture. 
D) greater dependence on exports to foreign markets.

Question 18

The major economic problem with recent farm policies is that they provide price and income subsidies that

Accepted Answer

A) are insufficient to keep farmers producing. 
B) increase the demand for farm products. 
C) slow the exodus of resources from agriculture. 
D) limit production to the most profitable products. 
A) are insufficient to keep farmers producing. 
B) increase the demand for farm products. 
C) slow the exodus of resources from agriculture. 
D) limit production to the most profitable products.

Question 19

The food-stamp program is designed to

Accepted Answer

A) increase the supply of farm products. 
B) decrease the supply of farm products. 
C) increase the demand for farm products. 
D) decrease the demand for farm products. 
A) increase the supply of farm products. 
B) decrease the supply of farm products. 
C) increase the demand for farm products. 
D) decrease the demand for farm products.

Question 20

The Food for Peace program

Accepted Answer

A) established price supports of 100 percent of parity. 
B) restricted American exports by restricting shipments to specific communist nations. 
C) expanded American exports by permitting less-developed countries to buy American surplus products with their own currencies. 
D) provided job training to farmers and farm workers who move to urban areas seeking employment. 
A) established price supports of 100 percent of parity. 
B) restricted American exports by restricting shipments to specific communist nations. 
C) expanded American exports by permitting less-developed countries to buy American surplus products with their own currencies. 
D) provided job training to farmers and farm workers who move to urban areas seeking employment.

Exam 22: Agriculture: Economics and Policy

Price support programs for agricultural products tend to cause shortages of these products.

One consequence of the long-run problem faced by farms has been a

The demand for most agricultural products is

Which of the following illustrates the basic idea of "parity" as a cornerstone of U.S.agricultural policy?

Which of the following statements is correct?

The Agricultural Act of 2014

Which of the following would, other things equal, reduce the demand for U.S.farm products?

Between 2002 and 2011, U.S.farmers received yearly direct subsidies from the federal government averaging about

Which of the following statements is correct?

A source of demand volatility for agricultural products is

What has been the effect of the outmigration of people from farming and the consolidation of smaller farms into larger ones on net farm income per farm household?

The price of a certain farm product was $1.25 in the base period when the parity ratio was 100.If the index of prices paid by farmers is now at 140, then the parity price of this farm product today should be

The Food, Conservation, and Energy Act of 2008 provided three main forms of cash commodity subsidies, including the following, except

In 2015, Farmer Lactoseâ€™s dairy farm lost money.Under the Agricultural Act of 2014 dairy margin protection program, which of the following events would have triggered payments to Farmer Lactose?

The Food, Conservation, and Energy Act of 2008 provided three types of agricultural subsidies: direct payments, countercyclical payments, and marketing loans.

Farm policy in the United States over the past eight decades has been designed primarily to

One reason for the year-to-year instability of agricultural product demand is the

The major economic problem with recent farm policies is that they provide price and income subsidies that

The food-stamp program is designed to

The Food for Peace program

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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