Deck 1: Introduction to the Economics of Agriculture

Question 1

All graphs must include the following on each axis:

A) functions and units
B) labels and units
C) functions and labels
D) functions, labels, and units

Answer 1

B

Question 2

Garbage is an example of:

A) an economic good
B) a noneconomic good
C) a scarce good
D) a mixed good

Answer 2

B

Question 3

All real-world economies are:

A) market
B) command
C) mixed
D) none of the other answers

Answer 3

C

Question 4

Since World War II, US agriculture has been characterized by:

A) massive consolidation of farms
B) massive substitution of machines and chemicals for workers
C) increasing exports of US agricultural products
D) all of the other answers

Question 5

Economics is:

A) universally loved, since it allows us to maximize our happiness
B) is all about making good decisions in our careers and lives
C) the allocation of scarce resources among non-competitive ends
D) the dollar value of the national output of goods and services

Question 6

A consumer is:

A) a household
B) a buyer
C) a customer
D) all of the other answers

Question 7

The statement, "The price of wheat should be higher" is an example of:

A) positive economics
B) normative economics
C) microeconomics
D) macroeconomics

Question 8

An economic good is always:

A) scarce
B) free
C) neither scarce nor free
D) both scarce and free

Question 9

Total revenues for a business firm in the US are equal to:

A) PQ
B) P + Q
C) PQ + P
D) none of the other answers

Question 10

A producer is:

A) an individual who makes a good or service
B) a firm that produces a product
C) a business firm that makes a good and sells it to maximize profits
D) all of the other answers

Question 11

The statement, "Michael Phelps is the greatest athlete of all times" is an example of:

A) positive economics
B) normative economics
C) microeconomics
D) macroeconomics

Question 12

The equation of a line, y = b+mx:

A) m is the y-intercept
B) b is the x-intercept
C) m is the slope
D) not enough information to know

Question 13

The payment to capital is:

A) land
B) profit
C) interest
D) rent

Question 14

An Iowa corn producer who has studied economics will desire to:

A) maximize output
B) apply the output-maximizing level of fertilizer
C) use the profit-maximizing level of all inputs, including fertilizer
D) not use fertilizer, since the cost has increased so dramatically

Question 15

If the price of corn increases:

A) producers are made better off
B) consumers are made better off
C) producers and consumers are made better off
D) producers benefit, but consumers lose

Question 16

In economics, the term, "capital" refers to:

A) financial capital only
B) physical and financial capital
C) physical capital only
D) it depends on the situation

Question 17

The statement, "The price of soybeans is $8.21/bu" is an example of:

A) positive economics
B) normative economics
C) microeconomics
D) macroeconomics

Question 18

Economic decisions are made by:

A) relative prices
B) absolute prices
C) constant-quality prices
D) economic prices

Question 19

A market economy:

A) allocates good by prices
B) allocates goods by firms
C) bases decisions on what is good for everybody
D) a democratic nation

Question 20

Scarcity:

A) is the fundamental principle of economics
B) applies to tangible goods, but not to intangible goods
C) does not hold for the major religions of the world
D) explains why we purchase ipods and trips to Florida

Question 21

If China continues to have high rates of economic growth, then the following groups will benefit:

A) US farmers
B) US ranchers
C) US farmers and ranchers
D) neither US farmers nor ranchers

Question 22

The relationship between the price of a good and the quantity of a good consumed is:

A) depends on the situation
B) inverse
C) direct
D) unknown

Question 23

Total Revenues are equal to:

A) price times quantity in terms of dollars
B) price times rent
C) net profit
D) the amount of costs that a business firm incurs

Question 24

If the price of organic food decreases relative to food produced with chemicals, then:

A) farmers will plant more acres to organic and conventional food
B) farmers will plant more acres to organic food
C) farmers will plant more acres to conventional food
D) farmers will continue to grow what they always have

Question 25

A phone call is an example of a:

A) relative good
B) good
C) service
D) input

Question 26

North Korea is an example of a:

A) market economy
B) command economy
C) mixed economy
D) an "Asian Tiger," a rapidly growing economy

Question 27

Economics exists because of:

A) markets
B) resources
C) production
D) scarcity

Question 28

Economics:

A) helps us make business, career, and personal decisions
B) provides a tool to choose between alternatives
C) both of the above
D) neither of the above

Question 29

In a command economy, resources are allocated by:

A) prices and returns
B) elected officials
C) the dictator
D) whoever is in charge

Question 30

The massive consolidation of farms in the US is due to:

A) substitution of K for L
B) exports
C) increases in the standard of living
D) off-farm income

Question 31

Microeconomics concerns:

A) the decisions of individual firms and households
B) economic growth
C) little, or small, economic decisions
D) unemployment and inflation

Question 32

The statement, "Gambling is legal in Nevada" is an example of:

A) positive Economics
B) normative Economics
C) prescriptive Economics
D) microeconomics

Question 33

Scarcity is the fundamental concept of economics because:

A) consumption is greater than production
B) it forces us to choose
C) the Law of Diminishing Returns
D) necessities such as food and water are widely available

Question 34

Suppose that the demand for hamburgers in Chicago is given by: P = 100 - 2Q. The y-intercept of the demand curve is given by:

A) 50
B) 100
C) 2
D) 1

Question 35

The term, ceteris paribus, in economics means:

A) prices are fixed and constant
B) a graph has only two variables in it
C) holding all else constant
D) equilibrium

Question 36

The payment to land is:

A) rent
B) profit
C) revenues
D) interest

Question 37

The US is an example of:

A) a market economy
B) a mixed economy
C) a command economy
D) none of the above

Question 38

A noneconomic good is also called:

A) a scarce good
B) a free good
C) a normative good
D) a positive good

Question 39

The payment to management is:

A) interest
B) profit
C) capital
D) rent

Question 40

A command economy could NOT be:

A) a dictatorship
B) a democracy
C) a market economy
D) a republic

Question 41

Most farm families:

A) rely on off-farm income
B) are full-time farmers
C) have lower levels of wealth relative to nonfarm families
D) have a large number of children relative to nonfarm families

Question 42

Agriculture is:

A) global in nature
B) local in nature
C) about farming, but not food
D) a depressed industry due to ethanol

Question 43

If the price of corn increases, then:

A) absolute prices change
B) relative prices change
C) a producer will produce more corn
D) not enough information to answer

Question 44

The price of cattle assumes:

A) different qualities of livestock
B) the same quality of livestock
C) different corn qualities used in cattle production
D) relative prices are held constant

Question 45

When the price of gasoline increases, ceteris paribus:

A) the quantity demanded of gasoline will decrease
B) the quantity demanded of gasoline will increase
C) the quantity demanded of gasoline will stay the same
D) not enough information to answer

Question 46

Economics assumes that all business firms desire to:

A) maximize TR
B) maximize TC
C) maximize profits
D) maximize the well-being of the firm's workers

Question 47

Suppose that Congress increased the minimum wage to $12.50/hour, ceteris paribus. This will:

A) increase the number of fast food workers
B) decrease the number of fast food workers
C) result in no change in the number of fast food workers
D) not enough information to answer

Question 48

Mechanization of agriculture has:

A) eliminated millions of agricultural jobs
B) been due to relative price changes
C) results in larger farms
D) all of the other answers

Question 49

Resources are:

A) plentiful
B) used to produce inputs
C) scarce
D) abundant in high-income nations

Question 50

If the price of corn increases relative to other crops:

A) corn production will increase, and corn consumption will increase
B) corn production will increase, and corn consumption will decrease
C) corn production will increase, and corn consumption will remain the same
D) corn production will decrease, and corn consumption will increase

Question 51

Define the term, "scarcity," and explain why scarcity is the fundamental problem of economics.

Question 52

Explain how economists use the concept of ceteris paribus.

Question 53

Briefly explain how resources are allocated in: (a) a market economy, and (b) a command economy.

Question 54

Draw a circular flow diagram of a mixed economy.

Question 55

Agricultural commodity prices constantly fluctuate. Write an essay on who benefits, who loses, and indirect effects of price movements of wheat, corn, soybeans, etc. What determines the fluctuations?

Question 56

Many claim that globalization leads to job loss for American workers. Write an essay on the strengths and weaknesses of this claim. Is globalization and trade good for agriculture? Explain your arguments carefully.

Question 57

Write an essay that explains the phrase, "scarcity forces us to choose." Why is scarcity the fundamental idea behind economics? Explain thoroughly and completely.

Question 58

Write an essay that explains the difference between scarce and nonscarce goods. Define and explain all terms.

Question 59

Write an essay that explains the difference between absolute and relative prices. Define and explain all terms.

Question 60

Graph the demand curve for beef, P= 200 - 2Q, where P is the price of beef in dollars per cwt and Q is the quantity of beef demanded in million cwt. Describe what this curve means.