Question 1

The fundamental cause of agricultural price and income instability in the United States has been a(n)

Accepted Answer

A) lack of foreign demand for U.S. agricultural products. 
B) lack of efficiency in the farm sector of the American economy. 
C) underallocation of resources to the farm sector of the economy relative to that of the nonfarm sector. 
D) overallocation of resources to the farm sector of the economy relative to that of the nonfarm sector. 
A) lack of foreign demand for U.S. agricultural products. 
B) lack of efficiency in the farm sector of the American economy. 
C) underallocation of resources to the farm sector of the economy relative to that of the nonfarm sector. 
D) overallocation of resources to the farm sector of the economy relative to that of the nonfarm sector.

Question 2

Refer to the demand graph for a farm product. Which of the following will cause the largest increase in total revenue for farmers?

Accepted Answer

A) a decrease in the price from Pₐ to Pc 
B) a decrease in the price from Pᵦ to Pc 
C) an increase in the price from Pc to Pₐ 
D) an increase in the price from Pc to Pᵦ 
A) a decrease in the price from Pₐ to Pc 
B) a decrease in the price from Pᵦ to Pc 
C) an increase in the price from Pc to Pₐ 
D) an increase in the price from Pc to Pᵦ

Question 3

Over the past several decades, farm employment has

Accepted Answer

A) grown absolutely but declined as a percentage of total employment. 
B) declined both absolutely and as a percentage of total employment. 
C) increased both absolutely and as a percentage of total employment. 
D) declined absolutely but increased as a percentage of total employment. 
A) grown absolutely but declined as a percentage of total employment. 
B) declined both absolutely and as a percentage of total employment. 
C) increased both absolutely and as a percentage of total employment. 
D) declined absolutely but increased as a percentage of total employment.

Question 4

What has been the effect of the outmigration of people from farming and the consolidation of smaller farms into larger ones on net farm income per farm household?

Accepted Answer

A) It is now far greater than nonfarm income. 
B) It is now significantly less than nonfarm income. 
C) It has decreased relative to nonfarm incomes. 
D) It has increased relative to nonfarm incomes. 
A) It is now far greater than nonfarm income. 
B) It is now significantly less than nonfarm income. 
C) It has decreased relative to nonfarm incomes. 
D) It has increased relative to nonfarm incomes.

Question 5

The amount of capital used per farmworker increased by how much from 1930 to 1980?

Accepted Answer

A) double 
B) fivefold 
C) tenfold 
D) fifteenfold 
A) double 
B) fivefold 
C) tenfold 
D) fifteenfold

Question 6

The 2014 Agriculture Act aims to achieve the following, except

Accepted Answer

A) maintain or protect dairy farmers' per-unit margin from milk. 
B) reduce the risk of price and revenue variability. 
C) stabilize the incomes of farmers to counter the unpredictable nature of farming. 
D) get some resources to leave farming and move into other productive sectors. 
A) maintain or protect dairy farmers' per-unit margin from milk. 
B) reduce the risk of price and revenue variability. 
C) stabilize the incomes of farmers to counter the unpredictable nature of farming. 
D) get some resources to leave farming and move into other productive sectors.

Question 7

What is the difference between farm commodities and food products? How does the number of competing firms change as farm commodities are processed into food?

Accepted Answer

Farm commodities are agricultural produc

Question 8

Domestic farm subsidies improve world trade and contribute to greater efficiency in the international allocation of agricultural resources.

Accepted Answer

A) True 
 B)False

Question 9

Incomes of U.S. farmers tend to be boosted by

Accepted Answer

A) very good harvests on farms abroad. 
B) economic weakness in Europe and Southeast Asia. 
C) increased protectionism in farm policies abroad. 
D) a depreciation of the U.S. dollar. 
A) very good harvests on farms abroad. 
B) economic weakness in Europe and Southeast Asia. 
C) increased protectionism in farm policies abroad. 
D) a depreciation of the U.S. dollar.

Question 10

Because the demand for agricultural products is price-inelastic, price support programs tend to

Accepted Answer

A) increase farm income. 
B) decrease farm income. 
C) have no effect upon farm income. 
D) cause farm incomes to fluctuate more than they would without such programs. 
A) increase farm income. 
B) decrease farm income. 
C) have no effect upon farm income. 
D) cause farm incomes to fluctuate more than they would without such programs.

Question 11

Since the 1930s, the U.S. government has supported agriculture with a "farm program" that includes the following, except

Accepted Answer

A) price ceilings for farm products. 
B) agricultural research. 
C) farm crop insurance. 
D) soil and water conservation. 
A) price ceilings for farm products. 
B) agricultural research. 
C) farm crop insurance. 
D) soil and water conservation.

Question 12

Explain why agricultural demand is unstable.

Accepted Answer

The major source of demand volatility fo

Question 13

The following factors have boosted farm income per farm household in the U.S., except

Accepted Answer

A) consolidation of farms. 
B) outmigration from farming. 
C) stronger, or appreciating, dollar. 
D) significant government subsidies. 
A) consolidation of farms. 
B) outmigration from farming. 
C) stronger, or appreciating, dollar. 
D) significant government subsidies.

Question 14

Farm price support programs have other costs besides the amount paid to farmers, and these costs include the following, except

Accepted Answer

A) rent-seeking activities by consumers. 
B) rent-seeking activities by farmers. 
C) administrative costs. 
D) environmental costs. 
A) rent-seeking activities by consumers. 
B) rent-seeking activities by farmers. 
C) administrative costs. 
D) environmental costs.

Question 15

The reason for the long-run decline of the agricultural industry is that the

Accepted Answer

A) increases in the demand for farm products have been greater than the increases in the supply of farm products. 
B) increases in the demand for farm products have been less than the increases in the supply of farm products. 
C) decreases in the demand for farm products have been less than the increases in the supply of farm products. 
D) increases in the demand for farm products have been greater than the decreases in the supply of farm products. 
A) increases in the demand for farm products have been greater than the increases in the supply of farm products. 
B) increases in the demand for farm products have been less than the increases in the supply of farm products. 
C) decreases in the demand for farm products have been less than the increases in the supply of farm products. 
D) increases in the demand for farm products have been greater than the decreases in the supply of farm products.

Question 16

Refer to the diagram for the corn market. A price support of B will cause a transfer from taxpayers to farmers of

Accepted Answer

A) 0 BKL. 
B) MAFG. 
C) 0 MFG. 
D) LKCG. 
A) 0 BKL. 
B) MAFG. 
C) 0 MFG. 
D) LKCG.

Question 17

The principal beneficiaries of government agricultural aid have been the very low-income farmers.

Accepted Answer

A) True 
 B)False

Question 18

Under the Food, Conservation, and Energy Act of 2008, if the target price for a bushel of corn was $2.63 and the price of corn fell to $2.25, then a farmer would have received

Accepted Answer

A) a marketing loan. 
B) a transition payment. 
C) an acreage allotment. 
D) a countercyclical payment. 
A) a marketing loan. 
B) a transition payment. 
C) an acreage allotment. 
D) a countercyclical payment.

Question 19

The demand for agricultural products is

Accepted Answer

A) relatively elastic with respect to price. 
B) relatively inelastic with respect to price. 
C) relatively elastic with respect to income. 
D) downsloping to the individual farmer but perfectly elastic to farmers as a group. 
A) relatively elastic with respect to price. 
B) relatively inelastic with respect to price. 
C) relatively elastic with respect to income. 
D) downsloping to the individual farmer but perfectly elastic to farmers as a group.

Question 20

In a purely competitive market, how would a surplus of a product be eliminated?

Accepted Answer

A) The price of the product would decrease. 
B) The price of the product would increase. 
C) The quantity supplied of the product would increase. 
D) The quantity demanded for the product would decrease. 
A) The price of the product would decrease. 
B) The price of the product would increase. 
C) The quantity supplied of the product would increase. 
D) The quantity demanded for the product would decrease.

Exam 22: Agriculture: Economics and Policy

The fundamental cause of agricultural price and income instability in the United States has been a(n)

Refer to the demand graph for a farm product. Which of the following will cause the largest increase in total revenue for farmers?

Over the past several decades, farm employment has

What has been the effect of the outmigration of people from farming and the consolidation of smaller farms into larger ones on net farm income per farm household?

The amount of capital used per farmworker increased by how much from 1930 to 1980?

The 2014 Agriculture Act aims to achieve the following, except

What is the difference between farm commodities and food products? How does the number of competing firms change as farm commodities are processed into food?

Domestic farm subsidies improve world trade and contribute to greater efficiency in the international allocation of agricultural resources.

Incomes of U.S. farmers tend to be boosted by

Because the demand for agricultural products is price-inelastic, price support programs tend to

Since the 1930s, the U.S. government has supported agriculture with a "farm program" that includes the following, except

Explain why agricultural demand is unstable.

The following factors have boosted farm income per farm household in the U.S., except

Farm price support programs have other costs besides the amount paid to farmers, and these costs include the following, except

The reason for the long-run decline of the agricultural industry is that the

Refer to the diagram for the corn market. A price support of B will cause a transfer from taxpayers to farmers of

The principal beneficiaries of government agricultural aid have been the very low-income farmers.

Under the Food, Conservation, and Energy Act of 2008, if the target price for a bushel of corn was $2.63 and the price of corn fell to $2.25, then a farmer would have received

The demand for agricultural products is

In a purely competitive market, how would a surplus of a product be eliminated?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

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

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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