Question 1

The reason for the long-run decline of the agricultural industry is that the

Accepted Answer

A)  increases in the demand for farm products have been greater than the increases in the supply of farm products. 
B)  increases in the demand for farm products have been less than the increases in the supply of farm products. 
C)  decreases in the demand for farm products have been less than the increases in the supply of farm products. 
D)  increases in the demand for farm products have been greater than the decreases in the supply of farm products. 
A)  increases in the demand for farm products have been greater than the increases in the supply of farm products. 
B)  increases in the demand for farm products have been less than the increases in the supply of farm products. 
C)  decreases in the demand for farm products have been less than the increases in the supply of farm products. 
D)  increases in the demand for farm products have been greater than the decreases in the supply of farm products.

Question 2

Since the 1930s, the U.S. government has subsidized agriculture with a "farm program" that includes the following, except

Accepted Answer

A)  attracting higher employment in the farm sector. 
B)  support for agricultural prices and income. 
C)  subsidized sale of U.S. farm products in world markets. 
D)  farm credit and financing. 
A)  attracting higher employment in the farm sector. 
B)  support for agricultural prices and income. 
C)  subsidized sale of U.S. farm products in world markets. 
D)  farm credit and financing.

Question 3

Import quotas on sugar may cost consumers $2 billion per year. But this quota goes unchallenged because the $10 average annual cost per person is so small that probably not one voter in 200 knows the quota exists. This statement describes

Accepted Answer

A)  the voting paradox. 
B)  the special-interest effect. 
C)  the median-voter model. 
D)  free-rider problem. 
A)  the voting paradox. 
B)  the special-interest effect. 
C)  the median-voter model. 
D)  free-rider problem.

Question 4

Domestic farm subsidies improve world trade and contribute to greater efficiency in the international allocation of agricultural resources.

Accepted Answer

A) True 
 B)False

Question 5

Farm price support programs have other costs besides the amount paid to farmers, and these costs include the following, except

Accepted Answer

A)  rent-seeking activities by consumers. 
B)  rent-seeking activities by farmers. 
C)  administrative costs. 
D)  environmental costs. 
A)  rent-seeking activities by consumers. 
B)  rent-seeking activities by farmers. 
C)  administrative costs. 
D)  environmental costs.

Question 6

Which of the following statements best describes the parity concept?

Accepted Answer

A)  The prices of farm commodities should vary inversely with changes in the prices-paid index for farmers. 
B)  Because of productivity increases, farmers are entitled to the same real income for a smaller volume of output. 
C)  The money incomes of farmers should always be the same, regardless of increases or decreases in the prices of the products they buy. 
D)  The production of a given real output entitles the producer to the same real income over time. 
A)  The prices of farm commodities should vary inversely with changes in the prices-paid index for farmers. 
B)  Because of productivity increases, farmers are entitled to the same real income for a smaller volume of output. 
C)  The money incomes of farmers should always be the same, regardless of increases or decreases in the prices of the products they buy. 
D)  The production of a given real output entitles the producer to the same real income over time.

Question 7

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 8

The federal government has not paid subsidies to farmers since passage of the Freedom to Farm Act in 1996.

Accepted Answer

A) True 
 B)False

Question 9

The agriculture industry includes both farm commodities and food products. Farm commodities are usually sold in

Accepted Answer

A)  monopolistically competitive or oligopolistic markets, while food-product markets are highly competitive. 
B)  highly competitive markets, while food-product markets are monopolistically competitive or oligopolistic. 
C)  monopolistically competitive or oligopolistic markets. 
D)  markets dominated by large firms. 
A)  monopolistically competitive or oligopolistic markets, while food-product markets are highly competitive. 
B)  highly competitive markets, while food-product markets are monopolistically competitive or oligopolistic. 
C)  monopolistically competitive or oligopolistic markets. 
D)  markets dominated by large firms.

Question 10

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 11

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 12

In the United States, "farm products" are generally produced in more markets, while "food products" tend to be sold in markets that are more .

Accepted Answer

A)  monopolistic; competitive 
B)  competitive; oligopolistic 
C)  oligopolistic; competitive 
D)  oligopolistic; monopolistic 
A)  monopolistic; competitive 
B)  competitive; oligopolistic 
C)  oligopolistic; competitive 
D)  oligopolistic; monopolistic

Question 13

The percentage of total employment in the U.S. that is accounted for by farms has been declining in the last six decades or so, but the absolute number of farm employment has actually risen slightly over those decades.

Accepted Answer

A) True 
 B)False

Question 14

Acreage allotments, which limit the number of acres planted with a particular crop, have an effect on the crop's price that is

Accepted Answer

A)  consistent with a price-support program. 
B)  contradictory to a price-support program. 
C)  consistent with a price-ceiling for the crop. 
D)  disadvantageous to the farmers of the crop. 
A)  consistent with a price-support program. 
B)  contradictory to a price-support program. 
C)  consistent with a price-ceiling for the crop. 
D)  disadvantageous to the farmers of the crop.

Question 15

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 16

If the prices received by farmers increased and the prices paid by farmers also increased, the parity ratio

Accepted Answer

A)  will necessarily be unchanged. 
B)  may either increase or decrease. 
C)  will necessarily increase. 
D)  will necessarily decline. 
A)  will necessarily be unchanged. 
B)  may either increase or decrease. 
C)  will necessarily increase. 
D)  will necessarily decline.

Question 17

Which of the following statements describes how a price-change in a purely competitive market would eliminate the surplus of an agricultural commodity?

Accepted Answer

A)  As the price increases, the quantity demanded increases while the quantity supplied decreases. 
B)  As the price increases, the quantity demanded decreases while the quantity supplied increases. 
C)  As the price decreases, the quantity demanded increases while the quantity supplied decreases. 
D)  As the price decreases, the quantity demanded decreases while the quantity supplied increases. 
A)  As the price increases, the quantity demanded increases while the quantity supplied decreases. 
B)  As the price increases, the quantity demanded decreases while the quantity supplied increases. 
C)  As the price decreases, the quantity demanded increases while the quantity supplied decreases. 
D)  As the price decreases, the quantity demanded decreases while the quantity supplied increases.

Question 18

Environmentalists generally support price supports because these subsidies motivate additional farm production.

Accepted Answer

A) True 
 B)False

Question 19

The ambitious plan to wean American agriculture from subsidies, as embodied in the Freedom to Farm Act of 1996,

Accepted Answer

A)  became fully realized by 2000. 
B)  unraveled in 1998 and 1999 when farm prices fell. 
C)  was not approved by the president. 
D)  was extended in 2002. 
A)  became fully realized by 2000. 
B)  unraveled in 1998 and 1999 when farm prices fell. 
C)  was not approved by the president. 
D)  was extended in 2002.

Question 20

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.

Exam 22: Agriculture: Economics and Policy

The reason for the long-run decline of the agricultural industry is that the

Since the 1930s, the U.S. government has subsidized agriculture with a "farm program" that includes the following, except

Import quotas on sugar may cost consumers $2 billion per year. But this quota goes unchallenged because the $10 average annual cost per person is so small that probably not one voter in 200 knows the quota exists. This statement describes

Domestic farm subsidies improve world trade and contribute to greater efficiency in the international allocation of agricultural resources.

Farm price support programs have other costs besides the amount paid to farmers, and these costs include the following, except

Which of the following statements best describes the parity concept?

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

The federal government has not paid subsidies to farmers since passage of the Freedom to Farm Act in 1996.

The agriculture industry includes both farm commodities and food products. Farm commodities are usually sold in

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

The Agricultural Act of 2014

In the United States, "farm products" are generally produced in more markets, while "food products" tend to be sold in markets that are more .

The percentage of total employment in the U.S. that is accounted for by farms has been declining in the last six decades or so, but the absolute number of farm employment has actually risen slightly over those decades.

Acreage allotments, which limit the number of acres planted with a particular crop, have an effect on the crop's price that is

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

If the prices received by farmers increased and the prices paid by farmers also increased, the parity ratio

Which of the following statements describes how a price-change in a purely competitive market would eliminate the surplus of an agricultural commodity?

Environmentalists generally support price supports because these subsidies motivate additional farm production.

The ambitious plan to wean American agriculture from subsidies, as embodied in the Freedom to Farm Act of 1996,

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

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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