Question 1

The 2014 Agriculture Act in the U.S.eliminated farm subsidies so as to encourage farmers to move their resources to nonfarming production activities.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following countries has the smallest percentage of its labor force employed in agriculture?

Accepted Answer

A) Madagascar 
B) France 
C) Brazil 
D) United States 
A) Madagascar 
B) France 
C) Brazil 
D) United States

Question 3

A significant reason that increases in demand for agricultural products have been relatively small is because increases in the

Accepted Answer

A) population of the United States have been greater than increases in the productivity of agriculture. 
B) population of the United States have been greater than decreases in the productivity of agriculture. 
C) incomes of U.S.consumers result in more than proportionate increases in their spending on agricultural products. 
D) incomes of U.S.consumers result in less than proportionate increases in their spending on agricultural products. 
A) population of the United States have been greater than increases in the productivity of agriculture. 
B) population of the United States have been greater than decreases in the productivity of agriculture. 
C) incomes of U.S.consumers result in more than proportionate increases in their spending on agricultural products. 
D) incomes of U.S.consumers result in less than proportionate increases in their spending on agricultural products.

Question 4

The three types of farm subsidies under the Food, Conservation, and Energy Act of 2008 are

Accepted Answer

A) equipment coupons, land leases, and income contributions. 
B) marketing agreements, transition payments, and interest loans. 
C) direct payments, countercyclical payments, and marketing loans. 
D) public land sales, fertilizer discounts, and farm bank loans. 
A) equipment coupons, land leases, and income contributions. 
B) marketing agreements, transition payments, and interest loans. 
C) direct payments, countercyclical payments, and marketing loans. 
D) public land sales, fertilizer discounts, and farm bank loans.

Question 5

The increase in the productivity of U.S.farmers has caused

Accepted Answer

A) more people to be attracted to farming. 
B) a decrease in the size of the average farm. 
C) a reduction in the number of people in farming. 
D) a reduction in the surpluses produced by farmers. 
A) more people to be attracted to farming. 
B) a decrease in the size of the average farm. 
C) a reduction in the number of people in farming. 
D) a reduction in the surpluses produced by farmers.

Question 6

Farm policy in the U.S.has been heavily criticized for the following, except

Accepted Answer

A) being fraught with policy contradictions. 
B) directing most subsidies to the wealthier farmers. 
C) benefiting foreign farmers, rather than domestic farmers. 
D) delaying the shift of resources away from agriculture. 
A) being fraught with policy contradictions. 
B) directing most subsidies to the wealthier farmers. 
C) benefiting foreign farmers, rather than domestic farmers. 
D) delaying the shift of resources away from agriculture.

Question 7

Which of the following was a feature of farm policy present in the Food, Conservation, and Energy Act of 2008 that was not part of the Freedom to Farm Act of 1996?

Accepted Answer

A) direct payments (direct subsidies) based on crops currently grown 
B) countercyclical payments 
C) farm buyouts by government 
D) acreage allotments (restrictions on planting) 
A) direct payments (direct subsidies) based on crops currently grown 
B) countercyclical payments 
C) farm buyouts by government 
D) acreage allotments (restrictions on planting)

Question 8

The price elasticity of demand for most agricultural products is relatively low.

Accepted Answer

A) True 
 B)False

Question 9

The Agricultural Act of 2014 expanded the direct payments, countercyclical payments, and marketing loans provided by the Food, Conservation, and Energy Act of 2008.

Accepted Answer

A) True 
 B)False

Question 10

Agricultural price-support programs result in consumers paying lower prices for the product.

Accepted Answer

A) True 
 B)False

Question 11

The demand for agricultural products is quite inelastic, and this can be explained by

Accepted Answer

A) economies of scale and the substitution effect. 
B) diminishing marginal returns and the income effect. 
C) increasing marginal cost and the income effect. 
D) the substitution effect and diminishing marginal utility. 
A) economies of scale and the substitution effect. 
B) diminishing marginal returns and the income effect. 
C) increasing marginal cost and the income effect. 
D) the substitution effect and diminishing marginal utility.

Question 12

The Agricultural Act of 2014 does not address the fundamental problem of agricultural subsidies, which is that those subsidies

Accepted Answer

A) reduce work incentive for farmers, thus reducing agricultural production. 
B) slow the exodus of resources from agriculture, increase production of agricultural products, and reduce crop prices and market incomes. 
C) increase the exodus of resources from agriculture and reduce investments by farmers in land and equipment. 
D) are based on past agricultural production and not on current agricultural production. 
A) reduce work incentive for farmers, thus reducing agricultural production. 
B) slow the exodus of resources from agriculture, increase production of agricultural products, and reduce crop prices and market incomes. 
C) increase the exodus of resources from agriculture and reduce investments by farmers in land and equipment. 
D) are based on past agricultural production and not on current agricultural production.

Question 13

Which of the following is not a reason to predict that farm subsidies might decline in the future?

Accepted Answer

A) a declining farm population 
B) the special interest effect 
C) pressure to cut the budget deficit 
D) conflicts with free world trade 
A) a declining farm population 
B) the special interest effect 
C) pressure to cut the budget deficit 
D) conflicts with free world trade

Question 14

If government establishes a system of price supports, it is in effect setting a

Accepted Answer

A) price ceiling. 
B) price floor. 
C) maximum level of output. 
D) minimum level of output. 
A) price ceiling. 
B) price floor. 
C) maximum level of output. 
D) minimum level of output.

Question 15

Which of the following is a major justification for public aid to agriculture in the United States?

Accepted Answer

A) The demand for farm products is income elastic. 
B) Technological progress has greatly reduced the demand for farm products. 
C) Farmers sell their products in highly imperfect markets and buy resources in highly competitive markets. 
D) Farmers are subject to extraordinary hazards that are hard to insure against. 
A) The demand for farm products is income elastic. 
B) Technological progress has greatly reduced the demand for farm products. 
C) Farmers sell their products in highly imperfect markets and buy resources in highly competitive markets. 
D) Farmers are subject to extraordinary hazards that are hard to insure against.

Question 16

The parity ratio

Accepted Answer

A) compares worker productivity in the farm and nonfarm sectors. 
B) is the ratio of per capita farm income to per capita nonfarm income. 
C) is the ratio of prices received by farmers to prices paid by farmers. 
D) is the ratio of prices paid by farmers to prices received by farmers. 
A) compares worker productivity in the farm and nonfarm sectors. 
B) is the ratio of per capita farm income to per capita nonfarm income. 
C) is the ratio of prices received by farmers to prices paid by farmers. 
D) is the ratio of prices paid by farmers to prices received by farmers.

Question 17

The Food for Peace program is designed to

Accepted Answer

A) achieve 100 percent price parity for all farm products. 
B) discover new uses for farm products through research and development. 
C) take agricultural land out of the production of feed grains. 
D) facilitate the distribution of surplus U.S.farm products in the developing countries. 
A) achieve 100 percent price parity for all farm products. 
B) discover new uses for farm products through research and development. 
C) take agricultural land out of the production of feed grains. 
D) facilitate the distribution of surplus U.S.farm products in the developing countries.

Question 18

Suppose the demand for good X, an agricultural product, is price-inelastic.This means that small variations in the quantity of X produced will be associated with large variations in the

Accepted Answer

A) price of good X. 
B) incomes of consumers of good X. 
C) cost of producing good X. 
D) quantity of good X exchanged. 
A) price of good X. 
B) incomes of consumers of good X. 
C) cost of producing good X. 
D) quantity of good X exchanged.

Question 19

The use of price-support programs in agriculture has hastened the exodus of resources from agriculture.

Accepted Answer

A) True 
 B)False

Question 20

Approximately what percentage of American consumers' total spending is on food?

Accepted Answer

A) about 10 percent 
B) 20-25 percent 
C) about 30 percent 
D) more than 40 percent 
A) about 10 percent 
B) 20-25 percent 
C) about 30 percent 
D) more than 40 percent

Exam 22: Agriculture: Economics and Policy

The 2014 Agriculture Act in the U.S.eliminated farm subsidies so as to encourage farmers to move their resources to nonfarming production activities.

Which of the following countries has the smallest percentage of its labor force employed in agriculture?

A significant reason that increases in demand for agricultural products have been relatively small is because increases in the

The three types of farm subsidies under the Food, Conservation, and Energy Act of 2008 are

The increase in the productivity of U.S.farmers has caused

Farm policy in the U.S.has been heavily criticized for the following, except

Which of the following was a feature of farm policy present in the Food, Conservation, and Energy Act of 2008 that was not part of the Freedom to Farm Act of 1996?

The price elasticity of demand for most agricultural products is relatively low.

The Agricultural Act of 2014 expanded the direct payments, countercyclical payments, and marketing loans provided by the Food, Conservation, and Energy Act of 2008.

Agricultural price-support programs result in consumers paying lower prices for the product.

The demand for agricultural products is quite inelastic, and this can be explained by

The Agricultural Act of 2014 does not address the fundamental problem of agricultural subsidies, which is that those subsidies

Which of the following is not a reason to predict that farm subsidies might decline in the future?

If government establishes a system of price supports, it is in effect setting a

Which of the following is a major justification for public aid to agriculture in the United States?

The parity ratio

The Food for Peace program is designed to

Suppose the demand for good X, an agricultural product, is price-inelastic.This means that small variations in the quantity of X produced will be associated with large variations in the

The use of price-support programs in agriculture has hastened the exodus of resources from agriculture.

Approximately what percentage of American consumers' total spending is on food?

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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