Question 1

Corn and beef prices are typically linked because

Accepted Answer

A) they are alternative outputs. 
B) corn is an input to beef. 
C) corn is a substitute for beef. 
D) corn is a complement to beef. 
A) they are alternative outputs. 
B) corn is an input to beef. 
C) corn is a substitute for beef. 
D) corn is a complement to beef. B

Question 2

The governmental expense of a farm price support tends to diminish as the price of the good falls.

Accepted Answer

A) True 
 B)False  False

Question 3

-In Figure 32.1, at the supported price-quantity combination where production is unlimited, and government buys the excess, the money consumers pay producers is\

Accepted Answer

A) 0ABQD 
B) 0P*CQ* 
C) 0PfloorBQD 
D) 0HCQ* 
A) 0ABQD 
B) 0P*CQ* 
C) 0PfloorBQD 
D) 0HCQ* C

Question 4

-In Figure 32.1, at the supported price-quantity combination where production is limited, the producer surplus is

Accepted Answer

A) APfloorB 
B) P*AC 
C) HP*C 
D) HPfloorBG 
A) APfloorB 
B) P*AC 
C) HP*C 
D) HPfloorBG

Question 5

-In Figure 32.1, at the market price-quantity combination where production is unlimited and the government buys the excess, the consumer surplus is

Accepted Answer

A) APfloorB 
B) P*AC 
C) HP*C 
D) HpfloorBG 
A) APfloorB 
B) P*AC 
C) HP*C 
D) HpfloorBG

Question 6

Farm price supports require that the government buy up surplus goods.

Accepted Answer

A) True 
 B)False

Question 7

Government can support agricultural prices by

Accepted Answer

A) making it illegal to produce without a government-provided license alone. 
B) buying up all output that consumers do not buy at the supported price alone. 
C) making it illegal to consume more than a specified amount. 
D) making it illegal to produce without a government-provided license and buying up all output that consumers do not buy at the supported price. 
A) making it illegal to produce without a government-provided license alone. 
B) buying up all output that consumers do not buy at the supported price alone. 
C) making it illegal to consume more than a specified amount. 
D) making it illegal to produce without a government-provided license and buying up all output that consumers do not buy at the supported price.

Question 8

-In Figure 32.1, at the supported price-quantity combination where production is unlimited and the government buys the excess, the producer surplus is

Accepted Answer

A) APfloorB 
B) P*AC 
C) HP*C 
D) HPfloorE 
A) APfloorB 
B) P*AC 
C) HP*C 
D) HPfloorE

Question 9

In 2007 and 2008 the sharp increase in the price of soybeans reflected primarily

Accepted Answer

A) the increased demand for corn needed to produce ethanol. 
B) increased use of advanced fertilizers by soybean producers. 
C) government cash subsidies to soybean producers per ton harvested. 
D) an unseasonably warm spring in the soybean-producing states of Indiana, Illinois and Iowa. 
A) the increased demand for corn needed to produce ethanol. 
B) increased use of advanced fertilizers by soybean producers. 
C) government cash subsidies to soybean producers per ton harvested. 
D) an unseasonably warm spring in the soybean-producing states of Indiana, Illinois and Iowa.

Question 10

-In Figure 32.1, at the market equilibrium price-quantity combination, the value to consumers is

Accepted Answer

A) 0ABQD 
B) 0P*CQ* 
C) 0PfloorBQD 
D) 0ACQ* 
A) 0ABQD 
B) 0P*CQ* 
C) 0PfloorBQD 
D) 0ACQ*

Question 11

-In Figure 32.1, at the supported price-quantity combination where production is limited, the variable cost to producers is

Accepted Answer

A) 0ABQD 
B) 0HEQS 
C) 0HGQD 
D) 0HCQ* 
A) 0ABQD 
B) 0HEQS 
C) 0HGQD 
D) 0HCQ*

Question 12

If the market price for a crop is $4.00 a bushel and the price support is $5.00, then dropping the price support to $3.50

Accepted Answer

A) will cause nothing to happen. 
B) will cause the price received by farmers to rise. 
C) will cause the price received by farmers to fall to $3.50. 
D) will cause the price received by farmers to fall to $4.00. 
A) will cause nothing to happen. 
B) will cause the price received by farmers to rise. 
C) will cause the price received by farmers to fall to $3.50. 
D) will cause the price received by farmers to fall to $4.00.

Question 13

When the government wishes to help producers of goods (such as farmers)they can enact a law establishing a _____, which economists call a price floor.

Accepted Answer

A) minimum price 
B) maximum price 
C) market equilibrium price 
D) lost price 
A) minimum price 
B) maximum price 
C) market equilibrium price 
D) lost price

Question 14

Since, according to the CPI, inflation between 1982 and 2015 was 137 percent

Accepted Answer

A) a 100% increase in prices of farm products would cut farmers' real incomes by 50%. 
B) unchanged prices for farm products would cut farmers' real incomes by 58%. 
C) a 50% increase in prices of farm products would cut farmers' real incomes by 50%. 
D) farmers' real incomes would fall only if the prices of farm products decreased. 
A) a 100% increase in prices of farm products would cut farmers' real incomes by 50%. 
B) unchanged prices for farm products would cut farmers' real incomes by 58%. 
C) a 50% increase in prices of farm products would cut farmers' real incomes by 50%. 
D) farmers' real incomes would fall only if the prices of farm products decreased.

Question 15

-In Figure 32.1, at the market price-quantity combination, the consumer surplus is

Accepted Answer

A) APfloorB 
B) P*AC 
C) HP*C 
D) HPfloorBG 
A) APfloorB 
B) P*AC 
C) HP*C 
D) HPfloorBG

Question 16

-In Figure 32.1, at the supported price-quantity combination where production is unlimited, and government buys the excess, the variable cost to producers is

Accepted Answer

A) 0ABQD 
B) 0HEQS 
C) 0HGQD 
D) 0HCQ* 
A) 0ABQD 
B) 0HEQS 
C) 0HGQD 
D) 0HCQ*

Question 17

Between 1974 and 2006 prices for food commodities

Accepted Answer

A) rose far faster than inflation. 
B) rose far slower than inflation. 
C) rose at about the overall rate of inflation. 
D) Remained largely constant even in nominal terms. 
A) rose far faster than inflation. 
B) rose far slower than inflation. 
C) rose at about the overall rate of inflation. 
D) Remained largely constant even in nominal terms.

Question 18

Between 2006 and 2013 corn prices

Accepted Answer

A) rose far faster than inflation. 
B) rose far slower than inflation. 
C) rose at about the overall rate of inflation. 
D) remained largely constant even in nominal terms. 
A) rose far faster than inflation. 
B) rose far slower than inflation. 
C) rose at about the overall rate of inflation. 
D) remained largely constant even in nominal terms.

Question 19

If the market price for a crop is $4.00 a bushel and the price support is $3.00, then raising the price support to $5.00

Accepted Answer

A) will cause nothing to happen. 
B) will cause the price received by farmers to fall. 
C) will cause the price received by farmers to rise to $4.00. 
D) will cause the price received by farmers to rise to $5.00. 
A) will cause nothing to happen. 
B) will cause the price received by farmers to fall. 
C) will cause the price received by farmers to rise to $4.00. 
D) will cause the price received by farmers to rise to $5.00.

Question 20

In 2009, the U.S. was supposed to be without price supports for milk and grains, but actually spent

Accepted Answer

A) $75 billion on such price supports. 
B) $45 billion on such price supports. 
C) $19 billion on such price supports. 
D) $1 billion on such price supports. 
A) $75 billion on such price supports. 
B) $45 billion on such price supports. 
C) $19 billion on such price supports. 
D) $1 billion on such price supports.

Exam 32: Farm Policy

Corn and beef prices are typically linked because

The governmental expense of a farm price support tends to diminish as the price of the good falls.

-In Figure 32.1, at the supported price-quantity combination where production is unlimited, and government buys the excess, the money consumers pay producers is\

-In Figure 32.1, at the supported price-quantity combination where production is limited, the producer surplus is

-In Figure 32.1, at the market price-quantity combination where production is unlimited and the government buys the excess, the consumer surplus is

Farm price supports require that the government buy up surplus goods.

Government can support agricultural prices by

-In Figure 32.1, at the supported price-quantity combination where production is unlimited and the government buys the excess, the producer surplus is

In 2007 and 2008 the sharp increase in the price of soybeans reflected primarily

-In Figure 32.1, at the market equilibrium price-quantity combination, the value to consumers is

-In Figure 32.1, at the supported price-quantity combination where production is limited, the variable cost to producers is

If the market price for a crop is $4.00 a bushel and the price support is $5.00, then dropping the price support to $3.50

When the government wishes to help producers of goods (such as farmers)they can enact a law establishing a _____, which economists call a price floor.

Since, according to the CPI, inflation between 1982 and 2015 was 137 percent

-In Figure 32.1, at the market price-quantity combination, the consumer surplus is

-In Figure 32.1, at the supported price-quantity combination where production is unlimited, and government buys the excess, the variable cost to producers is

Between 1974 and 2006 prices for food commodities

Between 2006 and 2013 corn prices

If the market price for a crop is $4.00 a bushel and the price support is $3.00, then raising the price support to $5.00

In 2009, the U.S. was supposed to be without price supports for milk and grains, but actually spent

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