Question 1

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 2

The demand for agricultural products

Accepted Answer

A)  has a price elasticity coefficient of about 0.20 to 0.25. 
B)  is elastic with respect to income but inelastic with respect to price. 
C)  has been decreasing about 8 percent per year. 
D)  has been rising more rapidly than the national income. 
A)  has a price elasticity coefficient of about 0.20 to 0.25. 
B)  is elastic with respect to income but inelastic with respect to price. 
C)  has been decreasing about 8 percent per year. 
D)  has been rising more rapidly than the national income.

Question 3

A declining parity ratio implies that the

Accepted Answer

A)  prices paid by farmers rose faster than the prices that farmers received. 
B)  prices received by farmers rose faster than the prices that farmers paid. 
C)  productivity of farmers is declining. 
D)  prices paid and received by farmers are both falling. 
A)  prices paid by farmers rose faster than the prices that farmers received. 
B)  prices received by farmers rose faster than the prices that farmers paid. 
C)  productivity of farmers is declining. 
D)  prices paid and received by farmers are both falling.

Question 4

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 5

Which group of farmers benefits the least from price supports in agriculture?

Accepted Answer

A)  those farmers receiving the highest average farm-family income 
B)  those farmers receiving the midrange average farm-family income 
C)  those farmers receiving the lowest average farm-family income 
D)  large corporate farms 
A)  those farmers receiving the highest average farm-family income 
B)  those farmers receiving the midrange average farm-family income 
C)  those farmers receiving the lowest average farm-family income 
D)  large corporate farms

Question 6

If in a certain year the indices of prices received and paid by farmers were 115 and 142 respectively, the parity ratio (in percentage terms) would be

Accepted Answer

A)  123. 
B)  81. 
C)  69. 
D)  27. 
A)  123. 
B)  81. 
C)  69. 
D)  27.

Question 7

Farm programs such as those of the United States and the European Union

Accepted Answer

A)  encourage the United States and the European Union to use tariffs and quotas to restrict agricultural imports. 
B)  cause U.S. and EU farmers to produce less than domestic consumers want to purchase. 
C)  increase world market prices for agricultural products. 
D)  raise farm output in developing nations. 
A)  encourage the United States and the European Union to use tariffs and quotas to restrict agricultural imports. 
B)  cause U.S. and EU farmers to produce less than domestic consumers want to purchase. 
C)  increase world market prices for agricultural products. 
D)  raise farm output in developing nations.

Question 8

(Last Word) The U.S. sugar program

Accepted Answer

A)  decreases the domestic price of sugar. 
B)  requires import quotas or tariffs on foreign sugar. 
C)  increases the export earnings of other sugar-producing countries. 
D)  aids developing countries that produce sugar. 
A)  decreases the domestic price of sugar. 
B)  requires import quotas or tariffs on foreign sugar. 
C)  increases the export earnings of other sugar-producing countries. 
D)  aids developing countries that produce sugar.

Question 9

Fixed costs faced by farmers typically include the following, except

Accepted Answer

A)  family labor. 
B)  fertilizer. 
C)  property taxes. 
D)  interest and rent payments. 
A)  family labor. 
B)  fertilizer. 
C)  property taxes. 
D)  interest and rent payments.

Question 10

The price and income support programs for agriculture have given the most benefit to those farmers with the most need for the government assistance.

Accepted Answer

A) True 
 B)False

Question 11

The Freedom to Farm Act of 1996 aimed to eliminate agricultural price supports and acreage allotments for many crops.

Accepted Answer

A) True 
 B)False

Question 12

The 2014 Agriculture Act aims to achieve the following, except

Accepted Answer

A)  maintain or protect dairy farmers' per-unit margin from milk. 
B)  reduce the risk of price and revenue variability. 
C)  stabilize the incomes of farmers to counter the unpredictable nature of farming. 
D)  get some resources to leave farming and move into other productive sectors. 
A)  maintain or protect dairy farmers' per-unit margin from milk. 
B)  reduce the risk of price and revenue variability. 
C)  stabilize the incomes of farmers to counter the unpredictable nature of farming. 
D)  get some resources to leave farming and move into other productive sectors.

Question 13

Facets of the U.S. government's ethanol program include the following, except

Accepted Answer

A)  tariffs on imported ethanol. 
B)  mandated use of ethanol in gasoline. 
C)  subsidies to oil refineries that use ethanol. 
D)  a price-ceiling to reduce the price of corn needed to make ethanol. 
A)  tariffs on imported ethanol. 
B)  mandated use of ethanol in gasoline. 
C)  subsidies to oil refineries that use ethanol. 
D)  a price-ceiling to reduce the price of corn needed to make ethanol.

Question 14

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 15

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

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

Which of the following is correct?

Accepted Answer

A)  The rapid expansion of foreign incomes will reduce U.S. agricultural exports. 
B)  A decrease in the international value of the dollar will reduce U.S. agricultural exports. 
C)  An increase in the international value of the dollar will reduce U.S. agricultural exports. 
D)  Changes in the international value of the dollar have no effect on U.S. agricultural exports. 
A)  The rapid expansion of foreign incomes will reduce U.S. agricultural exports. 
B)  A decrease in the international value of the dollar will reduce U.S. agricultural exports. 
C)  An increase in the international value of the dollar will reduce U.S. agricultural exports. 
D)  Changes in the international value of the dollar have no effect on U.S. agricultural exports.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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.

Question 20

If farm state legislators support the food-stamp program to aid the urban poor and urban state legislators in turn support farm subsidies, this is an example of

Accepted Answer

A)  the special-interest effect. 
B)  political logrolling. 
C)  the paradox of voting. 
D)  cost-benefit analysis. 
A)  the special-interest effect. 
B)  political logrolling. 
C)  the paradox of voting. 
D)  cost-benefit analysis.

Exam 22: Agriculture: Economics and Policy

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

The demand for agricultural products

A declining parity ratio implies that the

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?

Which group of farmers benefits the least from price supports in agriculture?

If in a certain year the indices of prices received and paid by farmers were 115 and 142 respectively, the parity ratio (in percentage terms) would be

Farm programs such as those of the United States and the European Union

(Last Word) The U.S. sugar program

Fixed costs faced by farmers typically include the following, except

The price and income support programs for agriculture have given the most benefit to those farmers with the most need for the government assistance.

The Freedom to Farm Act of 1996 aimed to eliminate agricultural price supports and acreage allotments for many crops.

The 2014 Agriculture Act aims to achieve the following, except

Facets of the U.S. government's ethanol program include the following, except

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

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

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

Which of the following is correct?

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

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

If farm state legislators support the food-stamp program to aid the urban poor and urban state legislators in turn support farm subsidies, this is an example of

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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