Question 1

Which of the following directly (as opposed to indirectly)raises the price of agricultural products?

Accepted Answer

A) marketing quota system 
B) acreage allotment program 
C) paying farmers not to produce 
D) price supports 
E) all of the above 
A) marketing quota system 
B) acreage allotment program 
C) paying farmers not to produce 
D) price supports 
E) all of the above

Question 2

Which combination of factors would lead to large price and total revenue changes?

Accepted Answer

A) inelastic demand for a product and large swings in supply 
B) elastic demand for a product and small swings in supply 
C) inelastic demand for a product and constant supply 
D) a and c 
E) none of the above 
A) inelastic demand for a product and large swings in supply 
B) elastic demand for a product and small swings in supply 
C) inelastic demand for a product and constant supply 
D) a and c 
E) none of the above

Question 3

Exhibit 39-1  
-Refer to Exhibit 39-1.Given the target price PT,the total deficiency payment made by the government is the area of

Accepted Answer

A) 0P1CQ2. 
B) 0PTBQ2. 
C) PTBCP1. 
D) PTBEP2. 
A) 0P1CQ2. 
B) 0PTBQ2. 
C) PTBCP1. 
D) PTBEP2.

Question 4

Increased productivity in the agricultural sector has __________ the output and __________ the prices of agricultural goods.

Accepted Answer

A) increased;reduced 
B) increased;increased 
C) decreased;reduced 
D) decreased;increased 
E) had no impact on;had no impact on 
A) increased;reduced 
B) increased;increased 
C) decreased;reduced 
D) decreased;increased 
E) had no impact on;had no impact on

Question 5

In agriculture during much of the 20th century,supply grew more than demand.Which two farm problems are these?

Accepted Answer

A) the high-productivity problem and the income elasticity problem 
B) the low-productivity problem and the income inelasticity problem 
C) the high-productivity problem and the income inelasticity problem 
D) the low-productivity problem and the income elasticity problem 
E) none of the above 
A) the high-productivity problem and the income elasticity problem 
B) the low-productivity problem and the income inelasticity problem 
C) the high-productivity problem and the income inelasticity problem 
D) the low-productivity problem and the income elasticity problem 
E) none of the above

Question 6

Exhibit 39-3  
-Refer to Exhibit 39-3.If P3 is a target price,the quantity supplied is

Accepted Answer

A) Q1. 
B) Q2. 
C) Q3. 
D) Q2 - Q3. 
E) Q1 - Q3. 
A) Q1. 
B) Q2. 
C) Q3. 
D) Q2 - Q3. 
E) Q1 - Q3.

Question 7

Stating that income elasticity of demand for potatoes equals 0.15 is equivalent to stating that if income

Accepted Answer

A) decreases by 10 percent,potato purchases decrease by 1.5 percent. 
B) increases by 10 percent,potato purchases increase by 15 percent. 
C) decreases by 1.5 percent,potato purchases decrease by 10 percent. 
D) increases by 15 percent,potato purchases decrease by 10 percent. 
E) none of the above 
A) decreases by 10 percent,potato purchases decrease by 1.5 percent. 
B) increases by 10 percent,potato purchases increase by 15 percent. 
C) decreases by 1.5 percent,potato purchases decrease by 10 percent. 
D) increases by 15 percent,potato purchases decrease by 10 percent. 
E) none of the above

Question 8

The productivity of the agriculture sector (of the economy)increases dramatically.A likely consequence is:

Accepted Answer

A) increased resources flowing into the agriculture sector. 
B) an increase in the supply of foodstuffs and lower prices for foodstuffs. 
C) an increase in the total revenue (farmers' receive)from selling foodstuffs,assuming the demand for their products is elastic. 
D) a decrease in the total revenue (farmers' receive)from selling foodstuffs,assuming the demand for their products is inelastic. 
E) none of the above 
A) increased resources flowing into the agriculture sector. 
B) an increase in the supply of foodstuffs and lower prices for foodstuffs. 
C) an increase in the total revenue (farmers' receive)from selling foodstuffs,assuming the demand for their products is elastic. 
D) a decrease in the total revenue (farmers' receive)from selling foodstuffs,assuming the demand for their products is inelastic. 
E) none of the above

Question 9

Exhibit 39-2  
-Refer to Exhibit 39-2.If P1 is a price support,the quantity of wheat purchased by the government would be equal to

Accepted Answer

A) Q0 - Q1. 
B) Q2 - Q1. 
C) Q2 - Q0. 
D) Q2. 
E) Q1. 
A) Q0 - Q1. 
B) Q2 - Q1. 
C) Q2 - Q0. 
D) Q2. 
E) Q1.

Question 10

Exhibit 39-6  
-Refer to Exhibit 39-6.A major change in weather conditions favorable to the production of X will shift the supply curve for X from its original position.The consequent change in price and total revenue would be less sharp if the demand curve for X is __________ because it is __________ over the relevant region.

Accepted Answer

A) D1;more elastic than D2 
B) D1;more inelastic than D2 
C) D2;more elastic than D1 
D) D2;more inelastic than D1 
A) D1;more elastic than D2 
B) D1;more inelastic than D2 
C) D2;more elastic than D1 
D) D2;more inelastic than D1

Question 11

In general,agricultural price supports

Accepted Answer

A) raise food prices. 
B) have no impact on food prices. 
C) are designed to lower food prices. 
D) c and d 
A) raise food prices. 
B) have no impact on food prices. 
C) are designed to lower food prices. 
D) c and d

Question 12

When the government implements an agricultural price support (above the equilibrium price),a surplus results and the government buys the surplus at the support price.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is true?

Accepted Answer

A) Bad weather isn't always that bad for farmers' incomes. 
B) An individual farmer would probably increase his revenues if he experienced good weather and other farmers experienced bad weather. 
C) Price elasticity of demand is a relevant factor to a farmer's income. 
D) a and b 
E) a,b,and c 
A) Bad weather isn't always that bad for farmers' incomes. 
B) An individual farmer would probably increase his revenues if he experienced good weather and other farmers experienced bad weather. 
C) Price elasticity of demand is a relevant factor to a farmer's income. 
D) a and b 
E) a,b,and c

Question 14

At the beginning of the 20th century one farmer in the U.S.produced enough to feed ____________ people,and at the end of the century,one farmer produced enough to feed ____________ people.

Accepted Answer

A) 20;40 
B) 7;15 
C) 12;42 
D) 8;35 
A) 20;40 
B) 7;15 
C) 12;42 
D) 8;35

Question 15

Increased productivity in the agricultural sector in conjunction with an inelastic demand curve for agricultural goods has caused a(n)__________ in output,a(n)__________ in price,and __________ revenues for farmers.

Accepted Answer

A) increase;decrease;higher 
B) increase;decrease;lower 
C) decrease;increase;higher 
D) decrease;increase;lower 
E) increase;increase;higher 
A) increase;decrease;higher 
B) increase;decrease;lower 
C) decrease;increase;higher 
D) decrease;increase;lower 
E) increase;increase;higher

Question 16

The price of a foodstuff falls and the total revenue (received by farmers for selling the foodstuff)rises.What could explain this?

Accepted Answer

A) Increased supply and elastic demand. 
B) Real income rises and the foodstuff is an inferior good. 
C) Real income rises and the foodstuff is a normal good. 
D) Increased supply and inelastic demand. 
E) none of the above 
A) Increased supply and elastic demand. 
B) Real income rises and the foodstuff is an inferior good. 
C) Real income rises and the foodstuff is a normal good. 
D) Increased supply and inelastic demand. 
E) none of the above

Question 17

Supply-restricting policies are intended to __________ prices and __________ farmers' revenues.

Accepted Answer

A) lower;increase 
B) lower;reduce 
C) raise;increase 
D) raise;reduce 
A) lower;increase 
B) lower;reduce 
C) raise;increase 
D) raise;reduce

Question 18

A decrease in the supply of an agricultural product will increase the total revenue of farmers if the demand for the agricultural product is

Accepted Answer

A) income elastic. 
B) income inelastic. 
C) price elastic. 
D) price inelastic. 
E) none of the above 
A) income elastic. 
B) income inelastic. 
C) price elastic. 
D) price inelastic. 
E) none of the above

Question 19

Supply-restricting policies are intended to shift the

Accepted Answer

A) supply curve to the left. 
B) supply curve to the right. 
C) demand curve to the left. 
D) demand curve to the right. 
E) b and d 
A) supply curve to the left. 
B) supply curve to the right. 
C) demand curve to the left. 
D) demand curve to the right. 
E) b and d

Question 20

Exhibit 39-4  
-Refer to Exhibit 39-4.At the government-established support price of $5 per bushel,the wheat surplus that government buys equals

Accepted Answer

A) 600 bushels. 
B) 400 bushels. 
C) 200 bushels. 
D) 0 bushels. 
A) 600 bushels. 
B) 400 bushels. 
C) 200 bushels. 
D) 0 bushels.

Exam 26: Stocks, bonds, futures, and Options

Which of the following directly (as opposed to indirectly)raises the price of agricultural products?

Which combination of factors would lead to large price and total revenue changes?

Exhibit 39-1 -Refer to Exhibit 39-1.Given the target price PT,the total deficiency payment made by the government is the area of

Increased productivity in the agricultural sector has __________ the output and __________ the prices of agricultural goods.

In agriculture during much of the 20th century,supply grew more than demand.Which two farm problems are these?

Exhibit 39-3 -Refer to Exhibit 39-3.If P3 is a target price,the quantity supplied is

Stating that income elasticity of demand for potatoes equals 0.15 is equivalent to stating that if income

The productivity of the agriculture sector (of the economy)increases dramatically.A likely consequence is:

Exhibit 39-2 -Refer to Exhibit 39-2.If P1 is a price support,the quantity of wheat purchased by the government would be equal to

In general,agricultural price supports

When the government implements an agricultural price support (above the equilibrium price),a surplus results and the government buys the surplus at the support price.

Which of the following statements is true?

At the beginning of the 20th century one farmer in the U.S.produced enough to feed ____________ people,and at the end of the century,one farmer produced enough to feed ____________ people.

Increased productivity in the agricultural sector in conjunction with an inelastic demand curve for agricultural goods has caused a(n)__________ in output,a(n)__________ in price,and __________ revenues for farmers.

The price of a foodstuff falls and the total revenue (received by farmers for selling the foodstuff)rises.What could explain this?

Supply-restricting policies are intended to __________ prices and __________ farmers' revenues.

A decrease in the supply of an agricultural product will increase the total revenue of farmers if the demand for the agricultural product is

Supply-restricting policies are intended to shift the

Exhibit 39-4 -Refer to Exhibit 39-4.At the government-established support price of $5 per bushel,the wheat surplus that government buys equals

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 P_T,the total deficiency payment made by the government is the area of

Increased productivity in the agricultural sector has the output and the prices of agricultural goods.

Exhibit 39-3 -Refer to Exhibit 39-3.If P₃ is a target price,the quantity supplied is

Exhibit 39-2 -Refer to Exhibit 39-2.If P₁ is a price support,the quantity of wheat purchased by the government would be equal to

At the beginning of the 20th century one farmer in the U.S.produced enough to feed people,and at the end of the century,one farmer produced enough to feed people.

Increased productivity in the agricultural sector in conjunction with an inelastic demand curve for agricultural goods has caused a(n) in output,a(n) in price,and __ revenues for farmers.

Supply-restricting policies are intended to prices and farmers' revenues.