Question 1

As a result of an agricultural price support,

Accepted Answer

A) quantity demanded is greater than quantity supplied. 
B) quantity supplied is greater than quantity demanded. 
C) fewer exchanges are made. 
D) a and c 
E) b and c 
A) quantity demanded is greater than quantity supplied. 
B) quantity supplied is greater than quantity demanded. 
C) fewer exchanges are made. 
D) a and c 
E) b and c

Question 2

Exhibit 39-1  
-Refer to Exhibit 39-1.At the support price of PT,how many units of the good must the government buy and store?

Accepted Answer

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

Question 3

Under an acreage allotment program,

Accepted Answer

A) the government sets a limit on the quantity of a product that a farmer is allowed to bring to market,which is intended to cause farmers to cut back on the number of acres they cultivate. 
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 farmed. 
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,which is intended to cause farmers to cut back on the number of acres they cultivate. 
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 farmed. 
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 4

The acreage allotment program involves

Accepted Answer

A) no direct payments to farmers. 
B) direct payments to farmers. 
C) the government leasing land to farmers that is to be cultivated by the farmers. 
D) the government leasing land from farmers that is to be cultivated by the government. 
E) none of the above 
A) no direct payments to farmers. 
B) direct payments to farmers. 
C) the government leasing land to farmers that is to be cultivated by the farmers. 
D) the government leasing land from farmers that is to be cultivated by the government. 
E) none of the above

Question 5

The price elasticity of demand for many agricultural products is (absolute value)less than 1,meaning that these products are inelastic in demand.

Accepted Answer

A) True 
 B)False

Question 6

A shift of the supply curve for farm products to the right in a price inelastic region of the demand curve for farm products

Accepted Answer

A) reduces price and total revenue. 
B) increases price and reduces total revenue. 
C) reduces price and increases total revenue. 
D) increases prices and total revenue. 
A) reduces price and total revenue. 
B) increases price and reduces total revenue. 
C) reduces price and increases total revenue. 
D) increases prices and total revenue.

Question 7

In 2000,farmers in the United States represented approximately what percentage of the population?

Accepted Answer

A) 8 percent 
B) 25 percent 
C) 1 percent 
D) 5 percent 
A) 8 percent 
B) 25 percent 
C) 1 percent 
D) 5 percent

Question 8

A government agricultural policy in which a mandated minimum price is set 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 9

Exhibit 39-4  
-Refer to Exhibit 39-4.At the competitive equilibrium price and quantity,the total revenue of wheat farmers will be

Accepted Answer

A) $1,400. 
B) $1,800. 
C) $2,400. 
D) $2,800. 
E) $5,000. 
A) $1,400. 
B) $1,800. 
C) $2,400. 
D) $2,800. 
E) $5,000.

Question 10

Which of the following statements represents a correct sequence of events?

Accepted Answer

A) Productivity rises in the agriculture sector,the supply curve of foodstuffs shifts to the left,price rises,and total revenue rises assuming demand is inelastic. 
B) Productivity rises in the agriculture sector,the supply curve of foodstuffs shifts to the right,price rises,and total revenue rises assuming demand is inelastic. 
C) Productivity rises in the agriculture sector,the supply curve of foodstuffs shifts to the right,price falls,and total revenue falls assuming demand is elastic. 
D) Productivity rises in the agriculture sector,the supply curve of foodstuffs shifts to the left,price falls,and total revenue rises assuming demand is elastic. 
E) none of the above 
A) Productivity rises in the agriculture sector,the supply curve of foodstuffs shifts to the left,price rises,and total revenue rises assuming demand is inelastic. 
B) Productivity rises in the agriculture sector,the supply curve of foodstuffs shifts to the right,price rises,and total revenue rises assuming demand is inelastic. 
C) Productivity rises in the agriculture sector,the supply curve of foodstuffs shifts to the right,price falls,and total revenue falls assuming demand is elastic. 
D) Productivity rises in the agriculture sector,the supply curve of foodstuffs shifts to the left,price falls,and total revenue rises assuming demand is elastic. 
E) none of the above

Question 11

If a farmer rents the land he works on,then any price support or deficiency payments he receives __________ capitalized into the value of that land,and so his economic profit from farming __________.

Accepted Answer

A) are;goes to zero 
B) are;remains positive 
C) are not;goes to zero 
D) are not;remains positive 
A) are;goes to zero 
B) are;remains positive 
C) are not;goes to zero 
D) are not;remains positive

Question 12

In the U.S. ,studies have shown that as real incomes have risen,per capita demand for food has been increasing by a much lower percentage.

Accepted Answer

A) True 
 B)False

Question 13

If market demand is inelastic and supply is subject to severe shifts from season to season,it follows that

Accepted Answer

A) price changes are likely to be small. 
B) price changes are likely to be large. 
C) total revenue is likely to be constant over time. 
D) total revenue is likely to be highly volatile. 
E) b and d 
A) price changes are likely to be small. 
B) price changes are likely to be large. 
C) total revenue is likely to be constant over time. 
D) total revenue is likely to be highly volatile. 
E) b and d

Question 14

If the demand for a particular farm product is inelastic between price P1 and P2 (where P2 > P1),farmers as a group would want to sell their product at the

Accepted Answer

A) higher price,but an individual farmer would rather sell his product at the lower price. 
B) higher price,and an individual farmer would rather sell his product at the higher price,too. 
C) lower price,but an individual farmer would rather sell his product at the higher price. 
D) lower price,and an individual farmer would rather sell his product at the lower price,too. 
A) higher price,but an individual farmer would rather sell his product at the lower price. 
B) higher price,and an individual farmer would rather sell his product at the higher price,too. 
C) lower price,but an individual farmer would rather sell his product at the higher price. 
D) lower price,and an individual farmer would rather sell his product at the lower price,too.

Question 15

Exhibit 39-3  
-Refer to Exhibit 39-3.If P3 is a target price,the total deficiency payment that government makes to farmers is

Accepted Answer

A) P2 x Q3. 
B) P3 x Q3. 
C) (P3 - P1)x Q1. 
D) (P3 - P1)x Q2. 
E) (P3 - P2)x Q3. 
A) P2 x Q3. 
B) P3 x Q3. 
C) (P3 - P1)x Q1. 
D) (P3 - P1)x Q2. 
E) (P3 - P2)x Q3.

Question 16

Exhibit 39-1  
-Refer to Exhibit 39-1.Given the target price of PT,farmers will receive a total income equal to

Accepted Answer

A) 0PTBQ2. 
B) 0P1CQ2. 
C) 0PTAQ3. 
D) 0P2EQ1. 
A) 0PTBQ2. 
B) 0P1CQ2. 
C) 0PTAQ3. 
D) 0P2EQ1.

Question 17

Exhibit 39-2  
-Refer to Exhibit 39-2.Given a target price of P1,what is the total deficiency payment made by the government?

Accepted Answer

A) (P1 - P2)x Q2 
B) (P1 - P0)x Q2 
C) P1 x Q1 
D) P0 x Q0 
A) (P1 - P2)x Q2 
B) (P1 - P0)x Q2 
C) P1 x Q1 
D) P0 x Q0

Question 18

A farmer has 500 acres on which he has previously grown corn.His yield per acre is 100 bushels of corn.If his production flexibility contract payment is $21,250,then what is the corn payment rate?

Accepted Answer

A) $0.45 
B) $0.67 
C) $0.50 
D) $0.10 
E) There is not enough information to answer the question. 
A) $0.45 
B) $0.67 
C) $0.50 
D) $0.10 
E) There is not enough information to answer the question.

Question 19

Why is bad weather sometimes good news for farmers?

Accepted Answer

A) Bad weather shifts the supply curve of agricultural products leftward,driving up price and total revenue (assuming demand is inelastic). 
B) Bad weather shifts the supply curve of agricultural products leftward,driving down price,and raising total revenue (assuming demand is elastic). 
C) Bad weather increases the demand for and price of agricultural products. 
D) Bad weather increases both the demand for and supply of agricultural products. 
A) Bad weather shifts the supply curve of agricultural products leftward,driving up price and total revenue (assuming demand is inelastic). 
B) Bad weather shifts the supply curve of agricultural products leftward,driving down price,and raising total revenue (assuming demand is elastic). 
C) Bad weather increases the demand for and price of agricultural products. 
D) Bad weather increases both the demand for and supply of agricultural products.

Question 20

With a price elasticity of demand of 0.45,when the price of soybeans falls by 10 percent,the quantity demanded of soybeans rises by approximately _____________ percent.

Accepted Answer

A) 4.50 
B) 45.0 
C) 0.45 
D) 0.56 
A) 4.50 
B) 45.0 
C) 0.45 
D) 0.56

Exam 26: Stocks, bonds, futures, and Options

As a result of an agricultural price support,

Exhibit 39-1 -Refer to Exhibit 39-1.At the support price of PT,how many units of the good must the government buy and store?

Under an acreage allotment program,

The acreage allotment program involves

The price elasticity of demand for many agricultural products is (absolute value)less than 1,meaning that these products are inelastic in demand.

A shift of the supply curve for farm products to the right in a price inelastic region of the demand curve for farm products

In 2000,farmers in the United States represented approximately what percentage of the population?

A government agricultural policy in which a mandated minimum price is set is the

Exhibit 39-4 -Refer to Exhibit 39-4.At the competitive equilibrium price and quantity,the total revenue of wheat farmers will be

Which of the following statements represents a correct sequence of events?

If a farmer rents the land he works on,then any price support or deficiency payments he receives __________ capitalized into the value of that land,and so his economic profit from farming __________.

In the U.S. ,studies have shown that as real incomes have risen,per capita demand for food has been increasing by a much lower percentage.

If market demand is inelastic and supply is subject to severe shifts from season to season,it follows that

If the demand for a particular farm product is inelastic between price P1 and P2 (where P2 > P1),farmers as a group would want to sell their product at the

Exhibit 39-3 -Refer to Exhibit 39-3.If P3 is a target price,the total deficiency payment that government makes to farmers is

Exhibit 39-1 -Refer to Exhibit 39-1.Given the target price of PT,farmers will receive a total income equal to

Exhibit 39-2 -Refer to Exhibit 39-2.Given a target price of P1,what is the total deficiency payment made by the government?

A farmer has 500 acres on which he has previously grown corn.His yield per acre is 100 bushels of corn.If his production flexibility contract payment is $21,250,then what is the corn payment rate?

Why is bad weather sometimes good news for farmers?

With a price elasticity of demand of 0.45,when the price of soybeans falls by 10 percent,the quantity demanded of soybeans rises by approximately _____________ percent.

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.At the support price of P_T,how many units of the good must the government buy and store?

If a farmer rents the land he works on,then any price support or deficiency payments he receives capitalized into the value of that land,and so his economic profit from farming .

If the demand for a particular farm product is inelastic between price P₁ and P₂ (where P₂ > P₁),farmers as a group would want to sell their product at the

Exhibit 39-3 -Refer to Exhibit 39-3.If P₃ is a target price,the total deficiency payment that government makes to farmers is

Exhibit 39-1 -Refer to Exhibit 39-1.Given the target price of P_T,farmers will receive a total income equal to

Exhibit 39-2 -Refer to Exhibit 39-2.Given a target price of P₁,what is the total deficiency payment made by the government?