Question 1

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. C

Question 2

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. C

Question 3

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. B

Question 4

Since 1950,U.S.farm exports have:

Accepted Answer

A)  increased as a percentage of U.S.farm output. 
B)  declined as a percentage of U.S.farm output. 
C)  averaged about 10 percent of U.S.farm output. 
D)  averaged about 50 percent of U.S.farm output. 
A)  increased as a percentage of U.S.farm output. 
B)  declined as a percentage of U.S.farm output. 
C)  averaged about 10 percent of U.S.farm output. 
D)  averaged about 50 percent of U.S.farm output.

Question 5

What percentage of their spending do U.S.consumers allocate to food purchases?

Accepted Answer

A)  1 percent. 
B)  8 percent. 
C)  13 percent. 
D)  15 percent. 
A)  1 percent. 
B)  8 percent. 
C)  13 percent. 
D)  15 percent.

Question 6

Since 1950,farm productivity has:

Accepted Answer

A)  advanced twice as fast as in nonfarm sectors of the economy. 
B)  lagged behind productivity advances in the nonfarm economy. 
C)  almost exactly matched productivity increases in the rest of the economy. 
D)  doubled. 
A)  advanced twice as fast as in nonfarm sectors of the economy. 
B)  lagged behind productivity advances in the nonfarm economy. 
C)  almost exactly matched productivity increases in the rest of the economy. 
D)  doubled.

Question 7

Which of the following arguments for farm subsidies is most closely associated with the parity concept?

Accepted Answer

A)  Although farmers produce necessities for the rest of us,they receive low incomes that are declining in real terms,and should therefore receive price and income support. 
B)  Farmers sell their output in purely competitive markets but must buy inputs from imperfectly competitive firms. 
C)  Farmers cannot fully insure themselves against the risks unusual to farming,such as floods,droughts,and pests. 
D)  The "family farm" is an American institution that should be protected and nurtured. 
A)  Although farmers produce necessities for the rest of us,they receive low incomes that are declining in real terms,and should therefore receive price and income support. 
B)  Farmers sell their output in purely competitive markets but must buy inputs from imperfectly competitive firms. 
C)  Farmers cannot fully insure themselves against the risks unusual to farming,such as floods,droughts,and pests. 
D)  The "family farm" is an American institution that should be protected and nurtured.

Question 8

The misallocation of resources associated with price supports:

Accepted Answer

A)  affects both domestic and foreign economies. 
B)  affects only foreign economies. 
C)  affects only the domestic economy. 
D)  is fully offset by reductions in food prices. 
A)  affects both domestic and foreign economies. 
B)  affects only foreign economies. 
C)  affects only the domestic economy. 
D)  is fully offset by reductions in food prices.

Question 9

The Food,Conservation,and Energy Act of 2008 provides three types of agricultural subsidies: direct payments,countercyclical payments,and marketing loans.

Accepted Answer

A) True 
 B)False

Question 10

The U.S.price support program,which guaranteed prices for currently grown crops:

Accepted Answer

A)  ended with the passage of the Freedom to Farm Act of 1996. 
B)  began with the Grain Planting Act of 1914. 
C)  remains the core of U.S.farm policy. 
D)  was restored in full and expanded by the Food,Conservation,and Energy Act of 2008. 
A)  ended with the passage of the Freedom to Farm Act of 1996. 
B)  began with the Grain Planting Act of 1914. 
C)  remains the core of U.S.farm policy. 
D)  was restored in full and expanded by the Food,Conservation,and Energy Act of 2008.

Question 11

Historically,many aspects of U.S.farm policies had their origins in the:

Accepted Answer

A)  Agricultural Extension Service Act. 
B)  Agricultural Adjustment Act. 
C)  Homestead Act. 
D)  Land Grant Act. 
A)  Agricultural Extension Service Act. 
B)  Agricultural Adjustment Act. 
C)  Homestead Act. 
D)  Land Grant Act.

Question 12

Increases in incomes usually result in more than proportionate increases in the demand for agricultural products in a growing economy.

Accepted Answer

A) True 
 B)False

Question 13

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 14

(Consider This)Which of the following methods is commonly used by farmers to "smooth" income over time?

Accepted Answer

A)  Producing only one crop to benefit from specialization. 
B)  Renting land from other farmers to increase production. 
C)  Entering contracts with buyers of their farm output to assure themselves of a fixed price. 
D)  All of these risk-management techniques are used to hedge against short-run price and output fluctuations. 
A)  Producing only one crop to benefit from specialization. 
B)  Renting land from other farmers to increase production. 
C)  Entering contracts with buyers of their farm output to assure themselves of a fixed price. 
D)  All of these risk-management techniques are used to hedge against short-run price and output fluctuations.

Question 15

Which of the following statements is correct?

Accepted Answer

A)  The price support program hastened the exodus of resources from agriculture. 
B)  The main beneficiaries of government price support assistance were the very low-income farmers. 
C)  If the demand for agricultural products is inelastic,a relatively small decrease in supply will increase gross farm incomes. 
D)  There is a misallocation of resources in rural America because of absolute and relative increases in the size of the farm population. 
A)  The price support program hastened the exodus of resources from agriculture. 
B)  The main beneficiaries of government price support assistance were the very low-income farmers. 
C)  If the demand for agricultural products is inelastic,a relatively small decrease in supply will increase gross farm incomes. 
D)  There is a misallocation of resources in rural America because of absolute and relative increases in the size of the farm population.

Question 16

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 17

Farmers typically sell their products in highly competitive markets and buy in imperfectly competitive markets.

Accepted Answer

A) True 
 B)False

Question 18

Because government price supports cause surplus production,government policies have been designed to:

Accepted Answer

A)  increase demand and decrease supply of farm products. 
B)  decrease demand and increase supply of farm products. 
C)  increase demand and increase supply of farm products. 
D)  decrease demand and decrease supply of farm products. 
A)  increase demand and decrease supply of farm products. 
B)  decrease demand and increase supply of farm products. 
C)  increase demand and increase supply of farm products. 
D)  decrease demand and decrease supply of farm products.

Question 19

The Food,Conservation,and Energy Act of 2008 does not address the fundamental problem of agricultural subsidies,which is that those subsidies:

Accepted Answer

A)  reduce work incentive for farmers,thus reducing agricultural production. 
B)  slow the exodus of resources from agriculture,increase production of agricultural products,and reduce crop prices and market incomes. 
C)  increase the exodus of resources from agriculture and reduce investments by farmers in land and equipment. 
D)  are based on past agricultural production and not on current agricultural production. 
A)  reduce work incentive for farmers,thus reducing agricultural production. 
B)  slow the exodus of resources from agriculture,increase production of agricultural products,and reduce crop prices and market incomes. 
C)  increase the exodus of resources from agriculture and reduce investments by farmers in land and equipment. 
D)  are based on past agricultural production and not on current agricultural production.

Question 20

Which of the following statements is correct?

Accepted Answer

A)  The parity ratio has not exceeded 100 in the 20th or 21st century. 
B)  An increase in prices paid by farmers relative to prices received by farmers will increase the parity ratio. 
C)  The parity ratio has generally been greater than 100 in the past four decades. 
D)  The parity ratio has generally declined over the past five decades. 
A)  The parity ratio has not exceeded 100 in the 20th or 21st century. 
B)  An increase in prices paid by farmers relative to prices received by farmers will increase the parity ratio. 
C)  The parity ratio has generally been greater than 100 in the past four decades. 
D)  The parity ratio has generally declined over the past five decades.

Exam 21: Agriculture: Economics and Policy

The growing importance of export demand for American agriculture has:

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

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:

Since 1950,U.S.farm exports have:

What percentage of their spending do U.S.consumers allocate to food purchases?

Since 1950,farm productivity has:

Which of the following arguments for farm subsidies is most closely associated with the parity concept?

The misallocation of resources associated with price supports:

The Food,Conservation,and Energy Act of 2008 provides three types of agricultural subsidies: direct payments,countercyclical payments,and marketing loans.

The U.S.price support program,which guaranteed prices for currently grown crops:

Historically,many aspects of U.S.farm policies had their origins in the:

Increases in incomes usually result in more than proportionate increases in the demand for agricultural products in a growing economy.

Which of the following statements is correct?

(Consider This)Which of the following methods is commonly used by farmers to "smooth" income over time?

Which of the following statements is correct?

Which of the following statements best describes the parity concept?

Farmers typically sell their products in highly competitive markets and buy in imperfectly competitive markets.

Because government price supports cause surplus production,government policies have been designed to:

The Food,Conservation,and Energy Act of 2008 does not address the fundamental problem of agricultural subsidies,which is that those subsidies:

Which of the following statements is correct?

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 Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition and Oligopoly

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

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