Question 1

If farm state legislators support the food-stamp program to aid the urban poor and urban state legislators in turn support farm subsidies, this is an example of

Accepted Answer

A)   the special-interest effect.
B)   political logrolling.
C)   the paradox of voting.
D)   cost-benefit analysis.E) B) and C)
F) None of the above

Question 2

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

Accepted Answer

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

Question 3

(Last Word)  The U.S. sugar program

Accepted Answer

A)   decreases the domestic price of sugar.
B)   requires import quotas or tariffs on foreign sugar.
C)   increases the export earnings of other sugar-producing countries.
D)   aids developing countries that produce sugar.E) B) and D)
F) C) and D)

Question 4

What is the reason why large, short-run declines in farm prices do not significantly reduce farm production in the short run?

Accepted Answer

A)   Farmers' variable costs are high compared with their fixed costs.
B)   Farmers' fixed costs are high compared with their variable costs.
C)   Farmers' prices received are greater than prices paid for agricultural products.
D)   Farmers' prices paid are greater than prices received for agricultural products.E) B) and C)
F) A) and B)

Question 5

Agricultural price-support programs result in consumers paying lower prices for the product.

Accepted Answer

A) True 
 B)False

Question 6

Because the demand for food is relatively price inelastic, what effects would you expect to see as a result of technological advances that reduce the cost of food production?

Accepted Answer

A)   Food prices would rise, but farm incomes would decline.
B)   Food prices would rise and farm incomes would rise.
C)   Food prices would decline and farm incomes would decline.
D)   Food prices would decline, but farm incomes would rise.E) None of the above
F) C) and D)

Question 7

Which group of farmers benefits the least from price supports in agriculture?

Accepted Answer

A)   those farmers receiving the highest average farm-family income
B)   those farmers receiving the midrange average farm-family income
C)   those farmers receiving the lowest average farm-family income
D)   large corporate farmsE) A) and B)
F) B) and C)

Question 8

Fixed costs faced by farmers typically include the following, except

Accepted Answer

A)   family labor.
B)   fertilizer.
C)   property taxes.
D)   interest and rent payments.E) B) and D)
F) B) and C)

Question 9

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

Accepted Answer

A)   encourage the United States and the European Union to use tariffs and quotas to restrict agricultural imports.
B)   cause U.S. and EU farmers to produce less than domestic consumers want to purchase.
C)   increase world market prices for agricultural products.
D)   raise farm output in developing nations.E) All of the above
F) C) and D)

Question 10

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.E) B) and C)
F) C) and D)

Question 11

A declining parity ratio implies that the

Accepted Answer

A)   prices paid by farmers rose faster than the prices that farmers received.
B)   prices received by farmers rose faster than the prices that farmers paid.
C)   productivity of farmers is declining.
D)   prices paid and received by farmers are both falling.E) None of the above
F) B) and C)

Question 12

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 13

Which of the following is correct?

Accepted Answer

A)   The rapid expansion of foreign incomes will reduce U.S. agricultural exports.
B)   A decrease in the international value of the dollar will reduce U.S. agricultural exports.
C)   An increase in the international value of the dollar will reduce U.S. agricultural exports.
D)   Changes in the international value of the dollar have no effect on U.S. agricultural exports.E) B) and C)
F) A) and D)

Question 14

The demand for agricultural products

Accepted Answer

A)   has a price elasticity coefficient of about 0.20 to 0.25.
B)   is elastic with respect to income but inelastic with respect to price.
C)   has been decreasing about 8 percent per year.
D)   has been rising more rapidly than the national income.E) All of the above
F) None of the above

Question 15

The government's promotion of greater production and use of corn-based ethanol was intended to

Accepted Answer

A)   reduce the price of ethanol-blended gasoline.
B)   bolster the demand for corn.
C)   reduce the surplus supply of corn.
D)   increase the importation of ethanol.E) B) and C)
F) A) and D)

Question 16

The concept of parity has provided a rationale for government price supports for farm products.

Accepted Answer

A) True 
 B)False

Question 17

If the demand for an agricultural product is inelastic, a bumper crop will

Accepted Answer

A)   raise price and decrease total revenues.
B)   raise price and increase total revenues.
C)   lower price and decrease total revenues.
D)   lower price and increase total revenues.E) A) and B)
F) B) and C)

Question 18

The Freedom to Farm Act of 1996 aimed to eliminate agricultural price supports and acreage allotments for many crops.

Accepted Answer

A) True 
 B)False

Question 19

In the last six-plus decades (1950-2015)  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 B)
F) A) and C)

Question 20

Facets of the U.S. government's ethanol program include the following, except

Accepted Answer

A)   tariffs on imported ethanol.
B)   mandated use of ethanol in gasoline.
C)   subsidies to oil refineries that use ethanol.
D)   a price-ceiling to reduce the price of corn needed to make ethanol.E) A) and B)
F) B) and C)

Exam 22: Agriculture: Economics and Policy

A declining parity ratio implies that the

Correct AnswerverifiedShow Answer

Which group of farmers benefits the least from price supports in agriculture?

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What is the reason why large, short-run declines in farm prices do not significantly reduce farm production in the short run?

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Facets of the U.S. government's ethanol program include the following, except

Correct AnswerverifiedShow Answer

The government's promotion of greater production and use of corn-based ethanol was intended to

Correct AnswerverifiedShow Answer

Agricultural price-support programs result in consumers paying lower prices for the product.

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

The demand for agricultural products

Correct AnswerverifiedShow Answer

The concept of parity has provided a rationale for government price supports for farm products.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The Freedom to Farm Act of 1996 aimed to eliminate agricultural price supports and acreage allotments for many crops.

Correct AnswerverifiedShow Answer

The 2014 Agriculture Act aims to achieve the following, except

Correct AnswerverifiedShow Answer

If the demand for an agricultural product is inelastic, a bumper crop will

Correct AnswerverifiedShow Answer

In the last six-plus decades (1950-2015) farm employment in the U.S. has been

Correct AnswerverifiedShow Answer

(Last Word) The U.S. sugar program

Correct AnswerverifiedShow Answer

Because the demand for food is relatively price inelastic, what effects would you expect to see as a result of technological advances that reduce the cost of food production?

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

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

Correct AnswerverifiedShow Answer

Fixed costs faced by farmers typically include the following, except

Correct AnswerverifiedShow Answer

If farm state legislators support the food-stamp program to aid the urban poor and urban state legislators in turn support farm subsidies, this is an example of

Correct AnswerverifiedShow Answer

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