Question 1

The Food, Conservation, and Energy Act of 2008 provided three types of agricultural subsidies: direct payments, countercyclical payments, and marketing loans.

Accepted Answer

A) True 
 B)False

Question 2

In 2015, Farmer Lactoseâ€™s dairy farm lost money.Under the Agricultural Act of 2014 dairy margin protection program, which of the following events would have triggered payments to Farmer Lactose?

Accepted Answer

A)  only the price of milk falling too low
B)  only the price of feed rising too high
C)  either the price of milk falling too low or the price of feed rising too high
D)  if the collective revenue of all dairy farmers in the county fell too lowE) A) and C)
F) None of the above

Question 3

Between 2002 and 2011, U.S.farmers received yearly direct subsidies from the federal government averaging about

Accepted Answer

A)  $2 billion.
B)  $10 billion.
C)  $20 billion.
D)  $40 billion.E) A) and B)
F) A) and C)

Question 4

One reason for the year-to-year instability of agricultural product demand is the

Accepted Answer

A)  high price-elasticity for agricultural products.
B)  fluctuations in weather patterns.
C)  declining role of technological progress in agriculture.
D)  greater dependence on exports to foreign markets.E) B) and D)
F) A) and B)

Question 5

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) B) and D)
F) All of the above

Question 6

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.E) C) and D)
F) None of the above

Question 7

The Food for Peace program

Accepted Answer

A)  established price supports of 100 percent of parity.
B)  restricted American exports by restricting shipments to specific communist nations.
C)  expanded American exports by permitting less-developed countries to buy American surplus products with their own currencies.
D)  provided job training to farmers and farm workers who move to urban areas seeking employment.E) C) and D)
F) A) and D)

Question 8

Farm policy in the United States over the past eight decades has been designed primarily to

Accepted Answer

A)  shift resources from the farm sector to the nonfarm sector.
B)  reduce monopoly in the farm sector.
C)  enhance and stabilize farm prices and income.
D)  produce a strategic reserve of food.E) All of the above
F) A) and B)

Question 9

The major economic problem with recent farm policies is that they provide price and income subsidies that

Accepted Answer

A)  are insufficient to keep farmers producing.
B)  increase the demand for farm products.
C)  slow the exodus of resources from agriculture.
D)  limit production to the most profitable products.E) A) and B)
F) A) and C)

Question 10

Which of the following illustrates the basic idea of "parity" as a cornerstone of U.S.agricultural policy?

Accepted Answer

A)  The price of corn per bushel should be held constant.
B)  A bushel of corn should exchange for more of all goods today than previously because farm incomes have declined.
C)  If a bushel of corn exchanged for a pair of pants at a previous time, the same rate of exchange should prevail today.
D)  If a bushel of corn exchanged for a pair of pants at a previous time, the rate of exchange today should be two bushels of corn for one pair of pants since productivity in farming has increased faster than in pants manufacturing.E) A) and B)
F) All 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) B) and D)
F) All of the above

Question 12

Which of the following statements is correct?

Accepted Answer

A)  Price supports may induce either an underallocation or an overallocation of resources to farm products.
B)  Supported prices have no effect on the allocation of resources to farm products.
C)  Supported prices induce an underallocation of resources to farm products.
D)  Price supports induce an overallocation of resources to farm products.E) A) and B)
F) B) and C)

Question 13

Price support programs for agricultural products tend to cause shortages of these products.

Accepted Answer

A) True 
 B)False

Question 14

A source of demand volatility for agricultural products is

Accepted Answer

A)  the strict application of "100 percent parity" by the Department of Agriculture.
B)  a sharp fluctuation in foreign demand for U.S.farm products.
C)  the large grain harvest which resulted from excellent weather.
D)  the increasing mechanization of farms.E) B) and D)
F) C) and D)

Question 15

One consequence of the long-run problem faced by farms has been a

Accepted Answer

A)  rapid increase in the price of farm output.
B)  massive exit of workers from agriculture to other sectors of the economy.
C)  smaller average farm size.
D)  reduction in U.S.exports of farm products.E) B) and C)
F) B) and D)

Question 16

The Food, Conservation, and Energy Act of 2008 provided three main forms of cash commodity subsidies, including the following, except

Accepted Answer

A)  direct payments.
B)  cash rebates.
C)  countercyclical payments.
D)  marketing loans.E) A) and B)
F) C) and D)

Question 17

The demand for most agricultural products is

Accepted Answer

A)  elastic with respect to price but inelastic with respect to income.
B)  inelastic with respect to price but elastic with respect to income.
C)  elastic with respect to both price and income.
D)  inelastic with respect to both price and income.E) B) and C)
F) A) and D)

Question 18

The price of a certain farm product was $1.25 in the base period when the parity ratio was 100.If the index of prices paid by farmers is now at 140, then the parity price of this farm product today should be

Accepted Answer

A)  $0.90.
B)  $1.50.
C)  $1.75.
D)  $2.00.E) B) and C)
F) All of the above

Question 19

Which of the following statements is correct?

Accepted Answer

A)  The parity ratio has not exceeded 100 in the 20th or 21st century.
B)  An increase in prices paid by farmers relative to prices received by farmers will increase the parity ratio.
C)  The parity ratio has generally been greater than 100 in the past four decades.
D)  The parity ratio has generally declined over the past five decades.E) A) and C)
F) A) and D)

Question 20

The Agricultural Act of 2014

Accepted Answer

A)  ended 60 years of U.S.price supports for American grain crops.
B)  eliminated the marketing loan program that was established by the Food, Conservation, and Energy Act of 2008.
C)  ended the "freedom to plant" approach of the Freedom to Farm Act of 1996 and restored acreage allotments.
D)  added two new crop insurance programs, agricultural risk coverage and price loss coverage.E) A) and C)
F) C) and D)

Exam 22: Agriculture: Economics and Policy

Between 2002 and 2011, U.S.farmers received yearly direct subsidies from the federal government averaging about

Correct AnswerverifiedShow Answer

One reason for the year-to-year instability of agricultural product demand is the

Correct AnswerverifiedShow Answer

The demand for most agricultural products is

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

The food-stamp program is designed to

Correct AnswerverifiedShow Answer

Farm policy in the United States over the past eight decades has been designed primarily to

Correct AnswerverifiedShow Answer

One consequence of the long-run problem faced by farms has been a

Correct AnswerverifiedShow Answer

Price support programs for agricultural products tend to cause shortages of these products.

Correct AnswerverifiedShow Answer

The Agricultural Act of 2014

Correct AnswerverifiedShow Answer

The Food, Conservation, and Energy Act of 2008 provided three types of agricultural subsidies: direct payments, countercyclical payments, and marketing loans.

Correct AnswerverifiedShow Answer

The price of a certain farm product was $1.25 in the base period when the parity ratio was 100.If the index of prices paid by farmers is now at 140, then the parity price of this farm product today should be

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The Food for Peace program

Correct AnswerverifiedShow Answer

The Food, Conservation, and Energy Act of 2008 provided three main forms of cash commodity subsidies, including the following, except

Correct AnswerverifiedShow Answer

Which of the following illustrates the basic idea of "parity" as a cornerstone of U.S.agricultural policy?

Correct AnswerverifiedShow Answer

In 2015, Farmer Lactoseâ€™s dairy farm lost money.Under the Agricultural Act of 2014 dairy margin protection program, which of the following events would have triggered payments to Farmer Lactose?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A source of demand volatility for agricultural products is

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The major economic problem with recent farm policies is that they provide price and income subsidies that

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified