Question 1

Public policy has been ineffective in alleviating the resource misallocation problem in American agriculture.

Accepted Answer

A) True 
 B)False  True

Question 2

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. A

Question 3

The principal beneficiaries of government agricultural aid have been the very low-income farmers.

Accepted Answer

A) True 
 B)False  False

Question 4

Which of the following is not characteristic of U.S. agriculture?

Accepted Answer

A)  Productivity has been increasing more slowly in agriculture than in the rest of the economy. 
B)  The demand for agricultural commodities increases less than proportionately to increases in income. 
C)  Resources in agriculture are relatively immobile. 
D)  Demand is inelastic with respect to price. 
A)  Productivity has been increasing more slowly in agriculture than in the rest of the economy. 
B)  The demand for agricultural commodities increases less than proportionately to increases in income. 
C)  Resources in agriculture are relatively immobile. 
D)  Demand is inelastic with respect to price.

Question 5

U.S. exports of farm products have generally declined as a percentage of U.S. farm output over the past half-century.

Accepted Answer

A) True 
 B)False

Question 6

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 7

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 8

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

Question 9

Farm employment in the United States amounted to about what percentage of the total employment in 2015?

Accepted Answer

A)  less than 2 percent 
B)  about 8 percent 
C)  about 15 percent 
D)  close to 20 percent 
A)  less than 2 percent 
B)  about 8 percent 
C)  about 15 percent 
D)  close to 20 percent

Question 10

It is estimated that the price elasticity coefficient for farm products is 0.2. Therefore, in order for consumers to increase their purchases of farm products by 10 percent, the prices of these products would have to fall

Accepted Answer

A)  20 percent. 
B)  40 percent. 
C)  50 percent. 
D)  80 percent 
A)  20 percent. 
B)  40 percent. 
C)  50 percent. 
D)  80 percent

Question 11

The inelastic demand for agricultural products means that

Accepted Answer

A)  large changes in agricultural production result in no change in farm prices and incomes. 
B)  small changes in agricultural production result in no change in farm prices and incomes. 
C)  large changes in agricultural production result in relatively smaller changes in farm prices and incomes. 
D)  small changes in agricultural production result in relatively larger changes in farm prices and incomes. 
A)  large changes in agricultural production result in no change in farm prices and incomes. 
B)  small changes in agricultural production result in no change in farm prices and incomes. 
C)  large changes in agricultural production result in relatively smaller changes in farm prices and incomes. 
D)  small changes in agricultural production result in relatively larger changes in farm prices and incomes.

Question 12

(Consider This) Which of the following has been an effect of the U.S. government's ethanol program?

Accepted Answer

A)  Prices for crops such as soybeans and sorghum have fallen dramatically. 
B)  Prices for beef, pork, and chicken have risen. 
C)  Water use has declined, as corn is a less water-intensive crop. 
D)  All of these effects have resulted from the ethanol program. 
A)  Prices for crops such as soybeans and sorghum have fallen dramatically. 
B)  Prices for beef, pork, and chicken have risen. 
C)  Water use has declined, as corn is a less water-intensive crop. 
D)  All of these effects have resulted from the ethanol program.

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

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 15

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 16

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 17

Agriculture is overcrowded because of absolute and relative increases in the size of farm employment.

Accepted Answer

A) True 
 B)False

Question 18

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 19

The growing importance of export demand for American agriculture has

Accepted Answer

A)  reduced the international value of the dollar. 
B)  had no significant effect on the stability of the demand for farm products. 
C)  destabilized the total demand for farm products. 
D)  stabilized the total demand for farm products. 
A)  reduced the international value of the dollar. 
B)  had no significant effect on the stability of the demand for farm products. 
C)  destabilized the total demand for farm products. 
D)  stabilized the total demand for farm products.

Question 20

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.

Exam 22: Agriculture: Economics and Policy

Public policy has been ineffective in alleviating the resource misallocation problem in American agriculture.

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

The principal beneficiaries of government agricultural aid have been the very low-income farmers.

Which of the following is not characteristic of U.S. agriculture?

U.S. exports of farm products have generally declined as a percentage of U.S. farm output over the past half-century.

The food-stamp program is designed to

Which of the following statements is correct?

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

Farm employment in the United States amounted to about what percentage of the total employment in 2015?

It is estimated that the price elasticity coefficient for farm products is 0.2. Therefore, in order for consumers to increase their purchases of farm products by 10 percent, the prices of these products would have to fall

The inelastic demand for agricultural products means that

(Consider This) Which of the following has been an effect of the U.S. government's ethanol program?

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

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

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

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

Agriculture is overcrowded because of absolute and relative increases in the size of farm employment.

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

The growing importance of export demand for American agriculture has

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

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

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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