Question 1

Exhibit 39-1  
-Refer to Exhibit 39-1.Given the target price of PT,the deficiency payment per unit is

Accepted Answer

A) PT - P2. 
B) PT + P1. 
C) PT - P2 
D) PT - P1. 
A) PT - P2. 
B) PT + P1. 
C) PT - P2 
D) PT - P1.

Question 2

Suppose the government decides that milk producers are not earning a high enough price for their milk to maintain an adequate standard of living and that the solution to the problem is to guarantee the milk producers a minimum price.We would expect that

Accepted Answer

A) consumers will have to pay a higher price per gallon of milk and will not be able to consume as much as they did before. 
B) the government will have to purchase the surplus milk on the market and then find a means of storing this milk. 
C) the dairy farmers will enjoy a higher standard of living at the expense of taxpayers and consumers. 
D) all of the above 
A) consumers will have to pay a higher price per gallon of milk and will not be able to consume as much as they did before. 
B) the government will have to purchase the surplus milk on the market and then find a means of storing this milk. 
C) the dairy farmers will enjoy a higher standard of living at the expense of taxpayers and consumers. 
D) all of the above

Question 3

Exhibit 39-4  
-Refer to Exhibit 39-4.The government feels that the present level of farmers' total revenues is insufficient to support a reasonable standard of living and wants to raise it to exactly $3,000.This can be achieved by

Accepted Answer

A) restricting supply so that price increases to $4. 
B) a price support of $5. 
C) restricting supply so that price increases to $5. 
D) any of the above 
E) none of the above 
A) restricting supply so that price increases to $4. 
B) a price support of $5. 
C) restricting supply so that price increases to $5. 
D) any of the above 
E) none of the above

Question 4

Studies show that as real income has been rising in the United States,the per-capita demand for food has been increasing by

Accepted Answer

A) much less,which means the demand for food is income inelastic. 
B) much more,which means the demand for food is income elastic. 
C) much more,which means the demand for food is income inelastic. 
D) as much,which means the demand for food is unit elastic. 
E) none of the above 
A) much less,which means the demand for food is income inelastic. 
B) much more,which means the demand for food is income elastic. 
C) much more,which means the demand for food is income inelastic. 
D) as much,which means the demand for food is unit elastic. 
E) none of the above

Question 5

Suppose the price elasticity of demand of for soy beans is 0.85.When the price of soybeans rises by 20 percent,the quantity demanded of soybeans falls by approximately _____________ percent.

Accepted Answer

A) 0.024 
B) 26.67 
C) 23.53 
D) 17.00 
A) 0.024 
B) 26.67 
C) 23.53 
D) 17.00

Question 6

If we assume that the income elasticity of demand for food has been around 0.2 and that agricultural producers have become increasingly more productive,we can conclude that

Accepted Answer

A) prices of food have increased. 
B) supply increases have been less than demand decreases. 
C) as consumers' real incomes have been increasing over the years,they have been spending absolutely less on food. 
D) prices of food have been stable. 
E) none of the above 
A) prices of food have increased. 
B) supply increases have been less than demand decreases. 
C) as consumers' real incomes have been increasing over the years,they have been spending absolutely less on food. 
D) prices of food have been stable. 
E) none of the above

Question 7

Exhibit 39-4  
-Refer to Exhibit 39-4.The price support of $6 per bushel results in private citizens spending __________ on wheat.

Accepted Answer

A) $600 
B) $3,000 
C) $3,600 
D) $4,800 
E) $6,600 
A) $600 
B) $3,000 
C) $3,600 
D) $4,800 
E) $6,600

Question 8

Under a marketing quota system,

Accepted Answer

A) the government sets a limit on the quantity of a product that a farmer is allowed to bring to market. 
B) farmers are paid to take part of their land out of cultivation. 
C) farmers are given limits as to the number of acres that can be used to produce a particular product. 
D) farmers are paid the difference between the market price of their product and a governmentally determined price that would maintain an established price parity. 
E) the government establishes a minimum price that farmers will be paid for their product,which causes the farmers to cut back on the number of acres planted. 
A) the government sets a limit on the quantity of a product that a farmer is allowed to bring to market. 
B) farmers are paid to take part of their land out of cultivation. 
C) farmers are given limits as to the number of acres that can be used to produce a particular product. 
D) farmers are paid the difference between the market price of their product and a governmentally determined price that would maintain an established price parity. 
E) the government establishes a minimum price that farmers will be paid for their product,which causes the farmers to cut back on the number of acres planted.

Question 9

If the government establishes a target price for particular agricultural products,then

Accepted Answer

A) the government sets a limit on the quantity of a product that a farmer is allowed to bring to market. 
B) farmers are paid to take part of their land out of cultivation,the intent being to reduce supply and raise price to the target level. 
C) farmers are given limits as to the number of acres that can be used to produce a particular product,the intent being to reduce supply and raise price to the target level. 
D) farmers are paid the difference between the market price of their product and a government-determined price. 
E) the government establishes a minimum price that farmers will be paid for their product,which causes the farmers to cut back on the number of acres planted in certain products,which,in turn,causes the price to rise to the target level. 
A) the government sets a limit on the quantity of a product that a farmer is allowed to bring to market. 
B) farmers are paid to take part of their land out of cultivation,the intent being to reduce supply and raise price to the target level. 
C) farmers are given limits as to the number of acres that can be used to produce a particular product,the intent being to reduce supply and raise price to the target level. 
D) farmers are paid the difference between the market price of their product and a government-determined price. 
E) the government establishes a minimum price that farmers will be paid for their product,which causes the farmers to cut back on the number of acres planted in certain products,which,in turn,causes the price to rise to the target level.

Question 10

During the twentieth century,the U.S.farm sector experienced

Accepted Answer

A) large increases in its ability to produce output. 
B) relatively little improvement in its ability to produce output. 
C) a marked decrease in its ability to produce output. 
D) relatively stable demand for its output. 
E) increasing relative prices for its output. 
A) large increases in its ability to produce output. 
B) relatively little improvement in its ability to produce output. 
C) a marked decrease in its ability to produce output. 
D) relatively stable demand for its output. 
E) increasing relative prices for its output.

Question 11

If the demand curve for agricultural products is inelastic and farmers as a group become more productive,then prices of agricultural goods will __________ and total revenue earned by farmers will __________.

Accepted Answer

A) decrease;increase 
B) decrease;decrease 
C) increase;increase 
D) increase;decrease 
E) We cannot answer this question without knowing how inelastic the demand curve is. 
A) decrease;increase 
B) decrease;decrease 
C) increase;increase 
D) increase;decrease 
E) We cannot answer this question without knowing how inelastic the demand curve is.

Question 12

If the demand curve for agricultural products is elastic and farmers as a group become more productive,then prices of agricultural goods will __________ and total revenue earned by farmers will __________.

Accepted Answer

A) decrease;increase 
B) decrease;decrease 
C) increase;increase 
D) increase;decrease 
E) We cannot answer this question without knowing how elastic the demand curve is. 
A) decrease;increase 
B) decrease;decrease 
C) increase;increase 
D) increase;decrease 
E) We cannot answer this question without knowing how elastic the demand curve is.

Question 13

If the demand curve for agricultural products is inelastic,then it would be in the best interest of farmers as a group to

Accepted Answer

A) increase output and thereby receive greater revenues. 
B) cause the price of their product to decrease. 
C) find some way to decrease the quantities of output that are placed on the market for sale. 
D) petition the government to find a way to decrease the demand for their product. 
E) a and b 
A) increase output and thereby receive greater revenues. 
B) cause the price of their product to decrease. 
C) find some way to decrease the quantities of output that are placed on the market for sale. 
D) petition the government to find a way to decrease the demand for their product. 
E) a and b

Question 14

Unlike in the 1930's,farmers today can insure themselves against price swings that would impact them adversely through the futures market.

Accepted Answer

A) True 
 B)False

Question 15

Exhibit 39-4  
-Refer to Exhibit 39-4.At a target price of $4 per bushel,how many bushels of wheat are produced?

Accepted Answer

A) 900 
B) 800 
C) 700 
D) 600 
A) 900 
B) 800 
C) 700 
D) 600

Question 16

In 1930,agriculture accounted for 10 percent of the U.S.GDP;in 2000,it accounted for only 5 percent of the GDP.

Accepted Answer

A) True 
 B)False

Question 17

A government agricultural policy that restricts output by limiting the number of farm acres that can be used to produce a particular crop is the

Accepted Answer

A) marketing quota system. 
B) acreage allotment program. 
C) price support program. 
D) target price system. 
E) paying farmers not to produce system. 
A) marketing quota system. 
B) acreage allotment program. 
C) price support program. 
D) target price system. 
E) paying farmers not to produce system.

Question 18

Suppose farmers get together and decide to be less productive.They want to do this so that they can shift the supply curve of farm products leftward and raise the price.They must be assuming that the demand curve between the current price and the higher price is

Accepted Answer

A) inelastic. 
B) elastic. 
C) unit elastic. 
D) There is not enough information to answer this question. 
A) inelastic. 
B) elastic. 
C) unit elastic. 
D) There is not enough information to answer this question.

Question 19

During much of the 20th century,agricultural product prices

Accepted Answer

A) rose relative to other prices. 
B) fell relative to other prices. 
C) neither rose nor fell relative to other prices. 
D) rose as agricultural productivity increased. 
A) rose relative to other prices. 
B) fell relative to other prices. 
C) neither rose nor fell relative to other prices. 
D) rose as agricultural productivity increased.

Question 20

An increase in productivity in the agricultural sector when the demand curve is inelastic results in __________ prices for consumers and __________ revenues for farmers

Accepted Answer

A) higher;lower 
B) higher;higher 
C) lower;lower 
D) lower;higher 
E) no change in;no change in 
A) higher;lower 
B) higher;higher 
C) lower;lower 
D) lower;higher 
E) no change in;no change in

Exam 26: Stocks, bonds, futures, and Options

Exhibit 39-1 -Refer to Exhibit 39-1.Given the target price of PT,the deficiency payment per unit is

Suppose the government decides that milk producers are not earning a high enough price for their milk to maintain an adequate standard of living and that the solution to the problem is to guarantee the milk producers a minimum price.We would expect that

Exhibit 39-4 -Refer to Exhibit 39-4.The government feels that the present level of farmers' total revenues is insufficient to support a reasonable standard of living and wants to raise it to exactly $3,000.This can be achieved by

Studies show that as real income has been rising in the United States,the per-capita demand for food has been increasing by

Suppose the price elasticity of demand of for soy beans is 0.85.When the price of soybeans rises by 20 percent,the quantity demanded of soybeans falls by approximately _____________ percent.

If we assume that the income elasticity of demand for food has been around 0.2 and that agricultural producers have become increasingly more productive,we can conclude that

Exhibit 39-4 -Refer to Exhibit 39-4.The price support of $6 per bushel results in private citizens spending __________ on wheat.

Under a marketing quota system,

If the government establishes a target price for particular agricultural products,then

During the twentieth century,the U.S.farm sector experienced

If the demand curve for agricultural products is inelastic and farmers as a group become more productive,then prices of agricultural goods will __________ and total revenue earned by farmers will __________.

If the demand curve for agricultural products is elastic and farmers as a group become more productive,then prices of agricultural goods will __________ and total revenue earned by farmers will __________.

If the demand curve for agricultural products is inelastic,then it would be in the best interest of farmers as a group to

Unlike in the 1930's,farmers today can insure themselves against price swings that would impact them adversely through the futures market.

Exhibit 39-4 -Refer to Exhibit 39-4.At a target price of $4 per bushel,how many bushels of wheat are produced?

In 1930,agriculture accounted for 10 percent of the U.S.GDP;in 2000,it accounted for only 5 percent of the GDP.

A government agricultural policy that restricts output by limiting the number of farm acres that can be used to produce a particular crop is the

Suppose farmers get together and decide to be less productive.They want to do this so that they can shift the supply curve of farm products leftward and raise the price.They must be assuming that the demand curve between the current price and the higher price is

During much of the 20th century,agricultural product prices

An increase in productivity in the agricultural sector when the demand curve is inelastic results in __________ prices for consumers and __________ revenues for farmers

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

Supply,demand,and Price: Applications

Macroeconomic Measurements, part I: Prices and Unemployment

Macroeconomic Measurements, part II: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Filters

Exhibit 39-1 -Refer to Exhibit 39-1.Given the target price of P_T,the deficiency payment per unit is

If the demand curve for agricultural products is inelastic and farmers as a group become more productive,then prices of agricultural goods will and total revenue earned by farmers will .

If the demand curve for agricultural products is elastic and farmers as a group become more productive,then prices of agricultural goods will and total revenue earned by farmers will .

An increase in productivity in the agricultural sector when the demand curve is inelastic results in prices for consumers and revenues for farmers