Question 1

A parity ratio of 0.6 in year A means that prices

Accepted Answer

A)  received in year A could buy 60 percent as much as prices received in the base period.
B)  received in the base period could buy 60 percent as much as prices received in year A.
C)  received in year A had risen by 60 percent over the prices received in the base period.
D)  paid by farmers in year A had risen by 60 percent over the prices paid in the base period.E) A) and D)
F) All of the above

Question 2

Acreage allotment programs were designed to

Accepted Answer

A)  reduce the supply of agricultural products.
B)  make the demand for farm products more price elastic.
C)  bolster the demand for agricultural commodities.
D)  accelerate the movement of human resources out of farming.E) None of the above
F) A) and D)

Question 3

Farm programs such as those of the United States and the European Union

Accepted Answer

A)  are consistent with free world trade in agricultural products.
B)  cause a misallocation of agricultural resources internationally.
C)  cause the United States and the European Union to underproduce, while other nations overproduce, farm products.
D)  raise productivity in developing nations.E) A) and B)
F) A) and C)

Question 4

If price supports are established and producers are producing more than consumers want to buy at that price, to maintain producers' income the government will have to

Accepted Answer

A)  reduce price supports.
B)  increase price supports.
C)  buy the surplus.
D)  restrict output.E) C) and D)
F) A) and B)

Question 5

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) None of the above

Question 6

Which of the following arguments for farm subsidies is most closely associated with the parity concept?

Accepted Answer

A)  Although farmers produce necessities for the rest of us, they receive low incomes that are declining in real terms and should therefore receive price and income support.
B)  Farmers sell their output in purely competitive markets but must buy inputs from imperfectly competitive firms.
C)  Farmers cannot fully insure themselves against the risks unusual to farming, such as floods, droughts, and pests.
D)  The "family farm" is an American institution that should be protected and nurtured.E) None of the above
F) B) and C)

Question 7

The federal government has not paid subsidies to farmers since passage of the Freedom to Farm Act in 1996.

Accepted Answer

A) True 
 B)False

Question 8

In the last six-plus decades (1950-2017) farm employment in the U.S. has been

Accepted Answer

A)  increasing both in absolute numbers and as a proportion of the total employment.
B)  increasing in absolute numbers, but declining as a proportion of the total employment.
C)  decreasing both in absolute numbers and as a proportion of the total employment.
D)  decreasing in absolute numbers, but rising as a proportion of the total employment.E) A) and C)
F) B) and C)

Question 9

Refer to the table. If government adopts a price support program that sets the price at $8, then there will be a

Accepted Answer

A)  shortage of 100 bushels.
B)  surplus of 100 bushels.
C)  surplus of 200 bushels.
D)  surplus of 300 bushels.E) A) and D)
F) B) and C)

Question 10

Which of the following would, other things equal, reduce the demand for U.S. farm products?

Accepted Answer

A)  poorer crops abroad
B)  strong economic growth abroad
C)  improved trade relations with China and Russia
D)  appreciation of the U.S. dollarE) A) and C)
F) None of the above

Question 11

The food-stamp program is designed to

Accepted Answer

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

Question 12

Farm programs such as those of the United States and the European Union cause a misallocation of international agricultural resources primarily because

Accepted Answer

A)  they distort domestic and world agricultural prices.
B)  they inhibit technological progress in agriculture.
C)  production and trade occur on the basis of comparative advantage.
D)  price supports are set below market-clearing levels.E) C) and D)
F) All of the above

Question 13

Suppose the demand for good X, an agricultural product, is price-inelastic. This means that small variations in the quantity of X produced will be associated with large variations in the

Accepted Answer

A)  price of good X.
B)  incomes of consumers of good X.
C)  cost of producing good X.
D)  quantity of good X exchanged.E) A) and D)
F) None of the above

Question 14

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) A) and B)
F) None of the above

Question 15

Define agribusiness.

Accepted Answer

Agribusiness is the portion of...

Question 16

Federal food distribution programs, such as the food stamp program, represent efforts to

Accepted Answer

A)  increase supplies of agricultural commodities.
B)  increase demand for agricultural commodities.
C)  decrease the value of farming to the nation.
D)  facilitate the movement of people from farms to cities.E) A) and D)
F) A) and C)

Question 17

Many members of Congress who represent urban low-income areas vote in favor of farm subsidies. In return, many representatives of agricultural areas support programs such as food stamps, which provide benefits for the urban poor. This situation would be an example of

Accepted Answer

A)  confusing symptoms with causes.
B)  misguided subsidies.
C)  rent-seeking behavior.
D)  political logrolling.E) C) and D)
F) A) and D)

Question 18

Refer to the diagram. Which of the following supply and demand shifts portray the long-run problem that farms face?

Accepted Answer

A)  S to S' and D to D'
B)  S to S' and D' to D
C)  S' to S and D' to D
D)  S' to S and D to D'E) None of the above
F) B) and D)

Question 19

Refer to the demand graph for a farm product. It suggests that farmers' revenues or incomes tend to

Accepted Answer

A)  fall when the demand for the farm product increases.
B)  fall when the supply of the farm product increases.
C)  increase when the supply of the farm product increases.
D)  be constant when supply of the farm product changes.E) None of the above
F) C) and D)

Question 20

If in a certain year the indices of prices received and paid by farmers were 115 and 142, respectively, the parity ratio (in percentage terms) would be approximately

Accepted Answer

A)  123.
B)  81.
C)  69.
D)  27.E) C) and D)
F) B) and C)

Exam 22: Agriculture: Economics and Policy

If in a certain year the indices of prices received and paid by farmers were 115 and 142, respectively, the parity ratio (in percentage terms) would be approximately

Correct AnswerverifiedShow Answer

Farm programs such as those of the United States and the European Union

Correct AnswerverifiedShow Answer

Refer to the diagram. Which of the following supply and demand shifts portray the long-run problem that farms face?

Correct AnswerverifiedShow Answer

If price supports are established and producers are producing more than consumers want to buy at that price, to maintain producers' income the government will have to

Correct AnswerverifiedShow Answer

Suppose the demand for good X, an agricultural product, is price-inelastic. This means that small variations in the quantity of X produced will be associated with large variations in the

Correct AnswerverifiedShow Answer

Acreage allotment programs were designed to

Correct AnswerverifiedShow Answer

The food-stamp program is designed to

Correct AnswerverifiedShow Answer

In the last six-plus decades (1950-2017) farm employment in the U.S. has been

Correct AnswerverifiedShow Answer

Farm programs such as those of the United States and the European Union cause a misallocation of international agricultural resources primarily because

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following arguments for farm subsidies is most closely associated with the parity concept?

Correct AnswerverifiedShow Answer

A parity ratio of 0.6 in year A means that prices

Correct AnswerverifiedShow Answer

Define agribusiness.

Correct AnswerverifiedAgribusiness is the portion of...View AnswerShow Answer

Federal food distribution programs, such as the food stamp program, represent efforts to

Correct AnswerverifiedShow Answer

Refer to the demand graph for a farm product. It suggests that farmers' revenues or incomes tend to

Correct AnswerverifiedShow Answer

The federal government has not paid subsidies to farmers since passage of the Freedom to Farm Act in 1996.

Correct AnswerverifiedShow Answer

Which of the following would, other things equal, reduce the demand for U.S. farm products?

Correct AnswerverifiedShow Answer

Many members of Congress who represent urban low-income areas vote in favor of farm subsidies. In return, many representatives of agricultural areas support programs such as food stamps, which provide benefits for the urban poor. This situation would be an example of

Correct AnswerverifiedShow Answer

Refer to the table. If government adopts a price support program that sets the price at $8, then there will be a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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Agribusiness is the portion of...
View Answer

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