Question 1

Which of the following statements best describes the demand for agricultural commodities?

Accepted Answer

A)  It takes a small decline in price to induce a large increase in the amount of agricultural products demanded. 
B)  The marginal utility of additional units of agricultural output diminishes very rapidly. 
C)  Small increases in income cause demand to increase by a proportionately larger amount. 
D)  When price declines,the resulting substitution effect is very large. 
A)  It takes a small decline in price to induce a large increase in the amount of agricultural products demanded. 
B)  The marginal utility of additional units of agricultural output diminishes very rapidly. 
C)  Small increases in income cause demand to increase by a proportionately larger amount. 
D)  When price declines,the resulting substitution effect is very large.

Question 2

A bumper crop of farm products causes:

Accepted Answer

A)  only a slight decline in the price of farm products because the demand for farm products is income inelastic. 
B)  a large decline in the price of farm products because the demand for farm products is price inelastic. 
C)  only a slight decline in the price of farm products because the demand for farm products is income elastic. 
D)  a large decline in the price of farm products because the demand for farm products is price elastic. 
A)  only a slight decline in the price of farm products because the demand for farm products is income inelastic. 
B)  a large decline in the price of farm products because the demand for farm products is price inelastic. 
C)  only a slight decline in the price of farm products because the demand for farm products is income elastic. 
D)  a large decline in the price of farm products because the demand for farm products is price elastic.

Question 3

If the prices paid by farmers increase and the prices received by farmers decrease,then the parity ratio:

Accepted Answer

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

Question 4

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 5

Which of the following would,other things equal,reduce the demand for U.S.farm products?

Accepted Answer

A)  Poorer crops abroad. 
B)  Strong economic growth abroad. 
C)  Improved trade relations with China and Russia. 
D)  Appreciation of the U.S.dollar. 
A)  Poorer crops abroad. 
B)  Strong economic growth abroad. 
C)  Improved trade relations with China and Russia. 
D)  Appreciation of the U.S.dollar.

Question 6

The food-stamp program is designed to:

Accepted Answer

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

Question 7

(Consider This)Which of the following has been an effect of the U.S.government's ethanol program?

Accepted Answer

A)  Prices for crops such as soybeans and sorghum have fallen dramatically. 
B)  Prices for beef,pork,and chicken have risen. 
C)  Water use has declined as corn is a less water-intensive crop. 
D)  All of these effects have resulted from the ethanol program. 
A)  Prices for crops such as soybeans and sorghum have fallen dramatically. 
B)  Prices for beef,pork,and chicken have risen. 
C)  Water use has declined as corn is a less water-intensive crop. 
D)  All of these effects have resulted from the ethanol program.

Question 8

Agriculture is overcrowded because of absolute and relative increases in the size of farm employment.

Accepted Answer

A) True 
 B)False

Question 9

Measured in terms of farm employment and the number of farms,agriculture has been:

Accepted Answer

A)  a declining industry. 
B)  an expanding industry. 
C)  a stable industry. 
D)  a volatile industry. 
A)  a declining industry. 
B)  an expanding industry. 
C)  a stable industry. 
D)  a volatile industry.

Question 10

Which of the following statements about U.S.agriculture is true as it relates to the past several decades?

Accepted Answer

A)  The demand for farm products has declined,the supply of farm products has increased,and the price of farm products has declined. 
B)  The demand for farm products has become both more income elastic and more price elastic. 
C)  Minimum efficient scale has increased,the prices of farm products have declined,and the number of farms has declined. 
D)  The prices of farm products have increased,minimum efficient scale has declined,and the supply of farm products has been stagnant. 
A)  The demand for farm products has declined,the supply of farm products has increased,and the price of farm products has declined. 
B)  The demand for farm products has become both more income elastic and more price elastic. 
C)  Minimum efficient scale has increased,the prices of farm products have declined,and the number of farms has declined. 
D)  The prices of farm products have increased,minimum efficient scale has declined,and the supply of farm products has been stagnant.

Question 11

Farm share of U.S.GDP has:

Accepted Answer

A)  declined from about 12 percent in 1950 to 1 percent today. 
B)  declined from about 12 percent in 1950 to 7 percent today. 
C)  declined from about 7 percent in 1950 to 1 percent today. 
D)  remained relatively stable over the past 50 years. 
A)  declined from about 12 percent in 1950 to 1 percent today. 
B)  declined from about 12 percent in 1950 to 7 percent today. 
C)  declined from about 7 percent in 1950 to 1 percent today. 
D)  remained relatively stable over the past 50 years.

Question 12

One consequence of the long-run problem faced by farms has been a:

Accepted Answer

A)  rapid increase in the price of farm output. 
B)  massive exit of workers from agriculture to other sectors of the economy. 
C)  smaller average farm size. 
D)  reduction in U.S.exports of farm products. 
A)  rapid increase in the price of farm output. 
B)  massive exit of workers from agriculture to other sectors of the economy. 
C)  smaller average farm size. 
D)  reduction in U.S.exports of farm products.

Question 13

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 14

The Food for Peace program is designed to:

Accepted Answer

A)  achieve 100 percent price parity for all farm products. 
B)  discover new uses for farm products through research and development. 
C)  take agricultural land out of the production of feed grains. 
D)  facilitate the distribution of surplus U.S.farm products in the developing countries. 
A)  achieve 100 percent price parity for all farm products. 
B)  discover new uses for farm products through research and development. 
C)  take agricultural land out of the production of feed grains. 
D)  facilitate the distribution of surplus U.S.farm products in the developing countries.

Question 15

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

Accepted Answer

A)  are consistent with free world trade in agricultural products. 
B)  cause a misallocation of agricultural resources internationally. 
C)  cause the United States and the European Union to underproduce,while other nations overproduce,farm products. 
D)  raise productivity in developing nations. 
A)  are consistent with free world trade in agricultural products. 
B)  cause a misallocation of agricultural resources internationally. 
C)  cause the United States and the European Union to underproduce,while other nations overproduce,farm products. 
D)  raise productivity in developing nations.

Question 16

Irving Tiller exclusively grew wheat in each of the past three years.Under the Food,Conservation,and Energy Act of 2008,Tiller:

Accepted Answer

A)  must grow wheat in the current year in order to receive direct payments from the federal government. 
B)  can grow whatever crop he wants to in the current year but will only receive direct payments from the federal government if the price of wheat falls below a targeted price. 
C)  can grow whatever crop he wants in the current year and will still receive direct payments from the federal government based on his previously grown wheat crops. 
D)  must grow something other than wheat to qualify for direct payments from the federal government. 
A)  must grow wheat in the current year in order to receive direct payments from the federal government. 
B)  can grow whatever crop he wants to in the current year but will only receive direct payments from the federal government if the price of wheat falls below a targeted price. 
C)  can grow whatever crop he wants in the current year and will still receive direct payments from the federal government based on his previously grown wheat crops. 
D)  must grow something other than wheat to qualify for direct payments from the federal government.

Question 17

Price supports:

Accepted Answer

A)  decrease pollution because participants must practice organic farming. 
B)  neither increase nor decrease environmental pollution. 
C)  increase pollution because supports encourage the cultivation of marginal land and the use of more pesticides and fertilizers. 
D)  discourage rent-seeking activity. 
A)  decrease pollution because participants must practice organic farming. 
B)  neither increase nor decrease environmental pollution. 
C)  increase pollution because supports encourage the cultivation of marginal land and the use of more pesticides and fertilizers. 
D)  discourage rent-seeking activity.

Question 18

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

Accepted Answer

A)  China. 
B)  France. 
C)  Brazil. 
D)  United States. 
A)  China. 
B)  France. 
C)  Brazil. 
D)  United States.

Question 19

When critics of U.S.farm policy say that it treats symptoms rather than causes,they mean that the:

Accepted Answer

A)  policy attempts to bolster low farm income,while the real problem is an overallocation of resources to agriculture. 
B)  policy deals with the overallocation of resources to agriculture,while the basic farm problem is low incomes. 
C)  policy attempts to bolster low farm incomes,while the real problem is an underallocation of resources to agriculture. 
D)  restriction of output in the short run may reduce productive capacity in agriculture in the long run. 
A)  policy attempts to bolster low farm income,while the real problem is an overallocation of resources to agriculture. 
B)  policy deals with the overallocation of resources to agriculture,while the basic farm problem is low incomes. 
C)  policy attempts to bolster low farm incomes,while the real problem is an underallocation of resources to agriculture. 
D)  restriction of output in the short run may reduce productive capacity in agriculture in the long run.

Question 20

Johnny Deer exclusively grew corn in each of the past three years.Under the Food,Conservation,and Energy Act of 2008,Deer:

Accepted Answer

A)  must grow corn in the current year in order to receive direct payments from the federal government. 
B)  can grow whatever crop he wants to in the current year but will only receive direct payments from the federal government if the price of corn falls below a targeted price. 
C)  will receive countercyclical payments if the price of corn falls below a targeted price,even though he does not grow corn in the current year. 
D)  must grow something other than corn to qualify for direct payments from the federal government. 
A)  must grow corn in the current year in order to receive direct payments from the federal government. 
B)  can grow whatever crop he wants to in the current year but will only receive direct payments from the federal government if the price of corn falls below a targeted price. 
C)  will receive countercyclical payments if the price of corn falls below a targeted price,even though he does not grow corn in the current year. 
D)  must grow something other than corn to qualify for direct payments from the federal government.

Exam 21: Agriculture: Economics and Policy

Which of the following statements best describes the demand for agricultural commodities?

A bumper crop of farm products causes:

If the prices paid by farmers increase and the prices received by farmers decrease,then the parity ratio:

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

Which of the following would,other things equal,reduce the demand for U.S.farm products?

The food-stamp program is designed to:

(Consider This)Which of the following has been an effect of the U.S.government's ethanol program?

Agriculture is overcrowded because of absolute and relative increases in the size of farm employment.

Measured in terms of farm employment and the number of farms,agriculture has been:

Which of the following statements about U.S.agriculture is true as it relates to the past several decades?

Farm share of U.S.GDP has:

One consequence of the long-run problem faced by farms has been a:

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 Food for Peace program is designed to:

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

Irving Tiller exclusively grew wheat in each of the past three years.Under the Food,Conservation,and Energy Act of 2008,Tiller:

Price supports:

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

When critics of U.S.farm policy say that it treats symptoms rather than causes,they mean that the:

Johnny Deer exclusively grew corn in each of the past three years.Under the Food,Conservation,and Energy Act of 2008,Deer:

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

Filters

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