Question 1

The major factor contributing to lower prices for many farm products in 1998 and 1999 was

Accepted Answer

A)  a rise in the cost of farm equipment.
B)  a drop in the value of farmland prices.
C)  greater demand for food and higher interest costs.
D)  reduced export demand and strong crop production.E) A) and B)
F) None of the above

Question 2

The Agricultural Act of 2014 does not address the fundamental problem of agricultural subsidies, which is that those subsidies

Accepted Answer

A)  reduce work incentive for farmers, thus reducing agricultural production.
B)  slow the exodus of resources from agriculture, increase production of agricultural products, and reduce crop prices and market incomes.
C)  increase the exodus of resources from agriculture and reduce investments by farmers in land and equipment.
D)  are based on past agricultural production and not on current agricultural production.E) C) and D)
F) A) and D)

Question 3

Domestic price supports on, say, sugar

Accepted Answer

A)  generate trade barriers to reduce imports of foreign sugar.
B)  increase world sugar prices.
C)  keep the domestic price of sugar artificially low.
D)  increase the earnings of foreign sugar producers.E) A) and D)
F) C) and D)

Question 4

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

Question 5

Refer to the table. If government adopts a price support program that sets the price at $9, then the total amount that government will pay to farmers of this product is

Accepted Answer

A)  $300.
B)  $1,800.
C)  $900.
D)  $2,700.E) B) and D)
F) B) and C)

Question 6

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)  0.9.
B)  1.75.
C)  1.5.
D)  2.E) All of the above
F) B) and C)

Question 7

If turnips are an example of an inferior good, then a decrease in the demand for turnips could be brought about by a(n)

Accepted Answer

A)  increase in consumer incomes.
B)  decrease in consumer incomes.
C)  decrease in the price of turnips.
D)  decrease in the price of some other product.E) C) and D)
F) B) and D)

Question 8

Farm price support programs tend to

Accepted Answer

A)  benefit both farmers and consumers of the farm products.
B)  benefit farmers and impose a smaller cost on consumers and taxpayers.
C)  lead to net social benefits.
D)  benefit farmers but impose a larger cost on consumers and taxpayers.E) None of the above
F) A) and D)

Question 9

Farm policy in the U.S. has been heavily criticized for the following, except

Accepted Answer

A)  being fraught with policy contradictions.
B)  directing most subsidies to the wealthier farmers.
C)  benefiting foreign farmers, rather than domestic farmers.
D)  delaying the shift of resources away from agriculture.E) B) and C)
F) C) and D)

Question 10

Refer to the table. If government adopts a price support program that sets the price at $9, then the total amount that private buyers would pay for this agricultural product is

Accepted Answer

A)  $300.
B)  $900.
C)  $1,800.
D)  $2,700.E) B) and D)
F) A) and C)

Question 11

The short-run instability in the prices of agricultural products arises from the following factors, except

Accepted Answer

A)  inelastic demand for the products.
B)  fluctuations in farm outputs.
C)  fluctuations in demand for the products.
D)  fluctuations in incomes of the farmers.E) C) and D)
F) B) and D)

Question 12

The Agricultural Act of 2014 created two new crop insurance programs, agricultural risk coverage and price loss coverage.

Accepted Answer

A) True 
 B)False

Question 13

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 C)
F) C) and D)

Question 14

What have been three major criticisms of agricultural policies over the past half century?

Accepted Answer

Economists have criticized U.S. farm pol...

Question 15

Which of the following has been a consequence of the Conservation Reserve Program?

Accepted Answer

A)  sawmills, electric utilities, and the construction industry have all suffered economically and lobbied for an ending of the program.
B)  The acreage of national park land has increased dramatically.
C)  a glut of trees has caused lumber prices to fall significantly.
D)  all of these have resulted from the program.E) A) and B)
F) A) and C)

Question 16

Farmers, though a small proportion of the population, can impose a large total cost to taxpayers in the form of agricultural subsidies because the average cost imposed on each individual taxpayer is small and not given much attention by a large number of taxpayers.

Accepted Answer

A) True 
 B)False

Question 17

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 D)
F) A) and C)

Question 18

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

Accepted Answer

A)  poorer crops abroad
B)  appreciation of the U.S. dollar
C)  deteriorating trade relations with China and Russia
D)  increases in foreign tariffs on imported farm productsE) A) and B)
F) All of the above

Question 19

Since 1950, farm productivity has

Accepted Answer

A)  advanced twice as fast as in nonfarm sectors of the economy.
B)  lagged behind productivity advances in the nonfarm economy.
C)  almost exactly matched productivity increases in the rest of the economy.
D)  doubled.E) All of the above
F) A) and C)

Question 20

What is the parity concept? Write the equation for the parity ratio.

Accepted Answer

The parity concept is the idea that year...

Exam 22: Agriculture: Economics and Policy

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

Correct AnswerverifiedShow Answer

The major factor contributing to lower prices for many farm products in 1998 and 1999 was

Correct AnswerverifiedShow Answer

What have been three major criticisms of agricultural policies over the past half century?

Correct AnswerverifiedEconomists have criticized U.S. farm pol...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following has been a consequence of the Conservation Reserve Program?

Correct AnswerverifiedShow Answer

Farm price support programs tend to

Correct AnswerverifiedShow Answer

Refer to the table. If government adopts a price support program that sets the price at $9, then the total amount that government will pay to farmers of this product is

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

Since 1950, farm productivity has

Correct AnswerverifiedShow Answer

The Agricultural Act of 2014 created two new crop insurance programs, agricultural risk coverage and price loss coverage.

Correct AnswerverifiedShow Answer

Farmers, though a small proportion of the population, can impose a large total cost to taxpayers in the form of agricultural subsidies because the average cost imposed on each individual taxpayer is small and not given much attention by a large number of taxpayers.

Correct AnswerverifiedShow Answer

The short-run instability in the prices of agricultural products arises from the following factors, except

Correct AnswerverifiedShow Answer

What is the parity concept? Write the equation for the parity ratio.

Correct AnswerverifiedThe parity concept is the idea that year...View AnswerShow Answer

If turnips are an example of an inferior good, then a decrease in the demand for turnips could be brought about by a(n)

Correct AnswerverifiedShow Answer

The Agricultural Act of 2014 does not address the fundamental problem of agricultural subsidies, which is that those subsidies

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Domestic price supports on, say, sugar

Correct AnswerverifiedShow Answer

Farm policy in the U.S. has been heavily criticized for the following, except

Correct AnswerverifiedShow Answer

Refer to the table. If government adopts a price support program that sets the price at $9, then the total amount that private buyers would pay for this agricultural product is

Correct AnswerverifiedShow Answer

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Economists have criticized U.S. farm pol...
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The parity concept is the idea that year...
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Correct Answer
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