Question 1

In 1994, the world's trading nations agreed to

Accepted Answer

A)  increase export subsidies to reduce world surpluses of farm products. 
B)  reduce agricultural subsidies and tariffs on agricultural imports. 
C)  eliminate all price supports for farm products. 
D)  create an international farm price support system to replace the price support systems of individual countries. 
A)  increase export subsidies to reduce world surpluses of farm products. 
B)  reduce agricultural subsidies and tariffs on agricultural imports. 
C)  eliminate all price supports for farm products. 
D)  create an international farm price support system to replace the price support systems of individual countries.

Question 2

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 3

If the demand for agricultural products is inelastic, a relatively small increase in supply will cause farm prices and incomes to decline.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following best describes the main problem faced by farms in the long run?

Accepted Answer

A)  Lagging technology has decreased the productivity of farmers and therefore resulted in low farm prices and incomes. 
B)  The highly inelastic nature of agricultural demand has caused small year-to-year fluctuations in farm output to result in highly unstable farm incomes. 
C)  The supply of farm products has increased relative to the demand for them, and, because demand is inelastic, farm prices and incomes have therefore declined. 
D)  The demand for farm products has increased relative to their supply, but the highly elastic nature of agricultural demand has caused these shifts to result in declining farm incomes. 
A)  Lagging technology has decreased the productivity of farmers and therefore resulted in low farm prices and incomes. 
B)  The highly inelastic nature of agricultural demand has caused small year-to-year fluctuations in farm output to result in highly unstable farm incomes. 
C)  The supply of farm products has increased relative to the demand for them, and, because demand is inelastic, farm prices and incomes have therefore declined. 
D)  The demand for farm products has increased relative to their supply, but the highly elastic nature of agricultural demand has caused these shifts to result in declining farm incomes.

Question 5

The effect of higher prices from the domestic sugar beet program in the United States is

Accepted Answer

A)  economically efficient because it maintains the income of sugar beet farmers and reduces potential unemployment costs. 
B)  that it discourages the production of sugar beets in the United States because businesses cannot afford to use sugar beets in production. 
C)  that it increases exports of sugar beets from the United States to other nations. 
D)  "regressive" because low-income households spend a larger percentage of their income on food than do high-income households. 
A)  economically efficient because it maintains the income of sugar beet farmers and reduces potential unemployment costs. 
B)  that it discourages the production of sugar beets in the United States because businesses cannot afford to use sugar beets in production. 
C)  that it increases exports of sugar beets from the United States to other nations. 
D)  "regressive" because low-income households spend a larger percentage of their income on food than do high-income households.

Question 6

Farm outputs' share of U.S. GDP from 1950 to the present has

Accepted Answer

A)  stayed roughly constant at about 10 percent. 
B)  dropped from about 30 percent to 10 percent. 
C)  stayed roughly constant at about 30 percent. 
D)  dropped from about 7 percent to 1 percent. 
A)  stayed roughly constant at about 10 percent. 
B)  dropped from about 30 percent to 10 percent. 
C)  stayed roughly constant at about 30 percent. 
D)  dropped from about 7 percent to 1 percent.

Question 7

The short-run instability in the prices of agricultural products arises from the following factors, except

Accepted Answer

A)  inelastic demand for the products. 
B)  fluctuations in farm outputs. 
C)  fluctuations in demand for the products. 
D)  fluctuations in incomes of the farmers. 
A)  inelastic demand for the products. 
B)  fluctuations in farm outputs. 
C)  fluctuations in demand for the products. 
D)  fluctuations in incomes of the farmers.

Question 8

The U.S. Department of Agriculture's productivity index in terms of farm output per unit of farm labor had a value of 10 in 1950. By 2009, the value of the productivity index was close to

Accepted Answer

A)  30. 
B)  80. 
C)  100. 
D)  120. 
A)  30. 
B)  80. 
C)  100. 
D)  120.

Question 9

If the parity ratio goes from 0.8 to 0.7, it means that the prices received by farmers had

Accepted Answer

A)  fallen by 12.5 percent relative to the prices they paid. 
B)  fallen by 10 percent relative to the prices they paid. 
C)  risen by 12.5 percent relative to the prices they paid. 
D)  risen by 10 percent relative to the prices they paid. 
A)  fallen by 12.5 percent relative to the prices they paid. 
B)  fallen by 10 percent relative to the prices they paid. 
C)  risen by 12.5 percent relative to the prices they paid. 
D)  risen by 10 percent relative to the prices they paid.

Question 10

If price supports are established and producers are producing more than consumers want to buy at that price, to maintain producers' income the government will have to

Accepted Answer

A)  reduce price supports. 
B)  increase price supports. 
C)  buy the surplus. 
D)  restrict output. 
A)  reduce price supports. 
B)  increase price supports. 
C)  buy the surplus. 
D)  restrict output.

Question 11

Farmers, though a small proportion of the population, can impose a large total cost to taxpayers in the form of agricultural subsidies because the average cost imposed on each individual taxpayer is small and not given much attention by a large number of taxpayers.

Accepted Answer

A) True 
 B)False

Question 12

The Food, Conservation, and Energy Act of 2008

Accepted Answer

A)  ended 60 years of U.S. price supports for American grain crops. 
B)  restored the U.S. price support system (for currently grown crops) that was ended in the Freedom to Farm Act of 1996. 
C)  ended the "freedom to plant" approach of the Freedom to Farm Act of 1996 and restored acreage allotments. 
D)  maintained the "freedom to plant" and "direct-payment" features of the Freedom to Farm Act of 1996, and also provided countercyclical payments and marketing loans to assist farmers. 
A)  ended 60 years of U.S. price supports for American grain crops. 
B)  restored the U.S. price support system (for currently grown crops) that was ended in the Freedom to Farm Act of 1996. 
C)  ended the "freedom to plant" approach of the Freedom to Farm Act of 1996 and restored acreage allotments. 
D)  maintained the "freedom to plant" and "direct-payment" features of the Freedom to Farm Act of 1996, and also provided countercyclical payments and marketing loans to assist farmers.

Question 13

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 14

The agricultural price support program in the United States has resulted in

Accepted Answer

A)  declining average farm income. 
B)  surpluses of price-supported farm commodities. 
C)  shortages of price-supported farm commodities. 
D)  a gradual migration of people from farms to cities. 
A)  declining average farm income. 
B)  surpluses of price-supported farm commodities. 
C)  shortages of price-supported farm commodities. 
D)  a gradual migration of people from farms to cities.

Question 15

The amount of capital used per farmworker increased by how much from 1930 to 1980?

Accepted Answer

A)  double 
B)  fivefold 
C)  tenfold 
D)  fifteen-fold 
A)  double 
B)  fivefold 
C)  tenfold 
D)  fifteen-fold

Question 16

Under the Food, Conservation, and Energy Act of 2008, if the target price for a bushel of corn was $2.63 and the price of corn fell to $2.25, then a farmer would have received

Accepted Answer

A)  a marketing loan. 
B)  a transition payment. 
C)  an acreage allotment. 
D)  a countercyclical payment. 
A)  a marketing loan. 
B)  a transition payment. 
C)  an acreage allotment. 
D)  a countercyclical payment.

Question 17

The demand for agricultural products is

Accepted Answer

A)  relatively elastic with respect to price. 
B)  relatively inelastic with respect to price. 
C)  relatively elastic with respect to income. 
D)  downsloping to the individual farmer but perfectly elastic to farmers as a group. 
A)  relatively elastic with respect to price. 
B)  relatively inelastic with respect to price. 
C)  relatively elastic with respect to income. 
D)  downsloping to the individual farmer but perfectly elastic to farmers as a group.

Question 18

The parity concept of agricultural policy suggests that farmers should obtain a constant ratio of the prices they receive for their farm products and the prices they pay for goods and services in general.

Accepted Answer

A) True 
 B)False

Question 19

Because the demand for agricultural products is highly price inelastic, a modest increase in supply will cause

Accepted Answer

A)  relatively large declines in farm prices and incomes. 
B)  relatively large increases in farm prices and incomes. 
C)  a small decline in farm prices, but an increase in farm incomes. 
D)  a large decline in farm prices, but an increase in farm incomes. 
A)  relatively large declines in farm prices and incomes. 
B)  relatively large increases in farm prices and incomes. 
C)  a small decline in farm prices, but an increase in farm incomes. 
D)  a large decline in farm prices, but an increase in farm incomes.

Question 20

Farm price support programs tend to

Accepted Answer

A)  benefit both farmers and consumers of the farm products. 
B)  benefit farmers and impose a smaller cost on consumers and taxpayers. 
C)  lead to net social benefits. 
D)  benefit farmers but impose a larger cost on consumers and taxpayers. 
A)  benefit both farmers and consumers of the farm products. 
B)  benefit farmers and impose a smaller cost on consumers and taxpayers. 
C)  lead to net social benefits. 
D)  benefit farmers but impose a larger cost on consumers and taxpayers.

Exam 22: Agriculture: Economics and Policy

In 1994, the world's trading nations agreed to

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

If the demand for agricultural products is inelastic, a relatively small increase in supply will cause farm prices and incomes to decline.

Which of the following best describes the main problem faced by farms in the long run?

The effect of higher prices from the domestic sugar beet program in the United States is

Farm outputs' share of U.S. GDP from 1950 to the present has

The short-run instability in the prices of agricultural products arises from the following factors, except

The U.S. Department of Agriculture's productivity index in terms of farm output per unit of farm labor had a value of 10 in 1950. By 2009, the value of the productivity index was close to

If the parity ratio goes from 0.8 to 0.7, it means that the prices received by farmers had

If price supports are established and producers are producing more than consumers want to buy at that price, to maintain producers' income the government will have to

Farmers, though a small proportion of the population, can impose a large total cost to taxpayers in the form of agricultural subsidies because the average cost imposed on each individual taxpayer is small and not given much attention by a large number of taxpayers.

The Food, Conservation, and Energy Act of 2008

The parity ratio

The agricultural price support program in the United States has resulted in

The amount of capital used per farmworker increased by how much from 1930 to 1980?

Under the Food, Conservation, and Energy Act of 2008, if the target price for a bushel of corn was $2.63 and the price of corn fell to $2.25, then a farmer would have received

The demand for agricultural products is

The parity concept of agricultural policy suggests that farmers should obtain a constant ratio of the prices they receive for their farm products and the prices they pay for goods and services in general.

Because the demand for agricultural products is highly price inelastic, a modest increase in supply will cause

Farm price support programs tend to

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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