Question 1

A decrease in the quantity of soybeans produced could result from

Accepted Answer

A)  elimination of farm subsidies to soybean producers.
B)  a decrease in the price of another farm crop that could be grown.
C)  a decrease in the cost of soybean production.
D)  an increase in consumer incomes.E) B) and C)
F) A) and B)

Question 2

It is estimated that the price elasticity coefficient for farm products is 0.2.Therefore, in order for consumers to increase their purchases of farm products by 10 percent, the prices of these products would have to fall

Accepted Answer

A)  20 percent.
B)  40 percent.
C)  50 percent.
D)  80 percentE) None of the above
F) A) and B)

Question 3

As a result of the acreage allotment programs, we would expect

Accepted Answer

A)  the best farmland to be taken out of production by farmers.
B)  the worst farmland to be taken out of production by farmers.
C)  lower farm incomes.
D)  lower farm prices.E) B) and D)
F) C) and D)

Question 4

Through the Freedom to Farm Act of 1996, farmers were

Accepted Answer

A)  guaranteed declining annual "transition payments" through 2002.
B)  given higher price supports for a larger number of agricultural products.
C)  protected by tariffs on imported agricultural products after 2002.
D)  allowed to consolidate smaller farms with larger farms to make farming more efficient.E) None of the above
F) A) and D)

Question 5

The agriculture industry includes both farm commodities and food products.Farm commodities are usually sold in

Accepted Answer

A)  monopolistically competitive or oligopolistic markets, while food-product markets are highly competitive.
B)  highly competitive markets, while food-product markets are monopolistically competitive or oligopolistic.
C)  monopolistically competitive or oligopolistic markets.
D)  markets dominated by large firms.E) None of the above
F) A) and D)

Question 6

Public policy has been ineffective in alleviating the resource misallocation problem in American agriculture.

Accepted Answer

A) True 
 B)False

Question 7

Which statement is correct?

Accepted Answer

A)  Farmers fared considerably better than most other economic groups during the Great Depression.
B)  Farmers typically sell their products in highly competitive markets and buy in imperfectly competitive markets.
C)  The principal beneficiaries of government farm subsidies have been the very-low-income farmers.
D)  The use of price supports has accelerated the exodus of resources from agriculture.E) B) and D)
F) B) and C)

Question 8

The concept of parity in farm policy implies that

Accepted Answer

A)  farm incomes should remain stable over the business cycle.
B)  a given output should always provide the farmer with the same real income.
C)  the purchasing power of the farmer's dollar should rise each year.
D)  the prices of farm commodities should remain stable.E) A) and B)
F) A) and D)

Question 9

The price and income support programs for agriculture have given the most benefit to those farmers with the most need for the government assistance.

Accepted Answer

A) True 
 B)False

Question 10

Agriculture is overcrowded because of absolute and relative increases in the size of farm employment.

Accepted Answer

A) True 
 B)False

Question 11

The parity concept of agricultural policy suggests that farmers should obtain a constant ratio of the prices they receive for their farm products and the prices they pay for goods and services in general.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)  attracting higher employment in the farm sector.
B)  support for agricultural prices and income.
C)  subsidized sale of U.S.farm products in world markets.
D)  farm credit and financing.E) B) and D)
F) A) and D)

Question 13

U.S.exports of farm products have generally declined as a percentage of U.S.farm output over the past half-century.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not a goal of the "parity concept" in U.S.agriculture policy?

Accepted Answer

A)  Farm householdsâ€™ real income from a given amount of real output should stay the same from year to year.
B)  The ratio of prices paid by farm households to prices received by farm households should remain about the same from year to year.
C)  The average farm householdsâ€™ income should remain at par or equal to the average income of all households.
D)  Changes in the prices paid by farm households should be matched by a proportionate increase in the prices received by farmers.E) None of the above
F) All of the above

Question 15

Which one of the following would be considered to be a risk management technique used by farmers?

Accepted Answer

A)  changing the parity ratio
B)  increasing product demand
C)  buying more arable farm land
D)  using crop revenue insuranceE) B) and C)
F) A) and D)

Question 16

In 2015, Farmer Levi grew only soybeans and received payments under the agricultural risk coverage program of the Agricultural Act of 2014.Which of the following best explains why Farmer Levi received these payments?

Accepted Answer

A)  The price of soybeans fell below a specified threshold.
B)  The total revenue of all farmers in the county fell below a specified threshold.
C)  The total revenue by all soybean growers in the county fell below a specified threshold.
D)  The total revenue of all soybean farmers participating in the program fell below a specified threshold.E) B) and C)
F) A) and D)

Question 17

As applied to agriculture, the special-interest effect suggests that

Accepted Answer

A)  urban legislators support farm legislation in exchange for rural legislators supporting urban-oriented legislation.
B)  a relatively small number of farmers receive large benefits at the expense of a much larger group of taxpayers who individually suffer small losses.
C)  politicians support farm subsidies because most of the associated costs are hidden rather than explicit.
D)  the size of farm subsidies should vary directly with a farmer's earned income.E) A) and B)
F) A) and C)

Question 18

What percentage of their spending do U.S.consumers allocate to food purchases?

Accepted Answer

A)  1 percent.
B)  7 percent.
C)  10 percent.
D)  13 percent.E) All of the above
F) A) and C)

Question 19

Government and private efforts to promote the production of "gasohol" using corn-based ethanol are an attempt to

Accepted Answer

A)  increase the supply of certain farm products.
B)  increase the demand for certain farm products.
C)  decrease the demand for certain farm products.
D)  decrease the supply of certain farm products.E) A) and D)
F) A) and C)

Question 20

If the demand for agricultural products is inelastic, a relatively small increase in supply will cause farm prices and incomes to decline.

Accepted Answer

A) True 
 B)False

Exam 22: Agriculture: Economics and Policy

What percentage of their spending do U.S.consumers allocate to food purchases?

Correct AnswerverifiedShow Answer

The agriculture industry includes both farm commodities and food products.Farm commodities are usually sold in

Correct AnswerverifiedShow Answer

It is estimated that the price elasticity coefficient for farm products is 0.2.Therefore, in order for consumers to increase their purchases of farm products by 10 percent, the prices of these products would have to fall

Correct AnswerverifiedShow Answer

Public policy has been ineffective in alleviating the resource misallocation problem in American agriculture.

Correct AnswerverifiedShow Answer

Which statement is correct?

Correct AnswerverifiedShow Answer

If the demand for agricultural products is inelastic, a relatively small increase in supply will cause farm prices and incomes to decline.

Correct AnswerverifiedShow Answer

Which of the following is not a goal of the "parity concept" in U.S.agriculture policy?

Correct AnswerverifiedShow Answer

Through the Freedom to Farm Act of 1996, farmers were

Correct AnswerverifiedShow Answer

As a result of the acreage allotment programs, we would expect

Correct AnswerverifiedShow Answer

Agriculture is overcrowded because of absolute and relative increases in the size of farm employment.

Correct AnswerverifiedShow Answer

U.S.exports of farm products have generally declined as a percentage of U.S.farm output over the past half-century.

Correct AnswerverifiedShow Answer

The concept of parity in farm policy implies that

Correct AnswerverifiedShow Answer

Government and private efforts to promote the production of "gasohol" using corn-based ethanol are an attempt to

Correct AnswerverifiedShow Answer

As applied to agriculture, the special-interest effect suggests that

Correct AnswerverifiedShow Answer

The parity concept of agricultural policy suggests that farmers should obtain a constant ratio of the prices they receive for their farm products and the prices they pay for goods and services in general.

Correct AnswerverifiedShow Answer

In 2015, Farmer Levi grew only soybeans and received payments under the agricultural risk coverage program of the Agricultural Act of 2014.Which of the following best explains why Farmer Levi received these payments?

Correct AnswerverifiedShow Answer

The price and income support programs for agriculture have given the most benefit to those farmers with the most need for the government assistance.

Correct AnswerverifiedShow Answer

Which one of the following would be considered to be a risk management technique used by farmers?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A decrease in the quantity of soybeans produced could result from

Correct AnswerverifiedShow Answer

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