Question 1

Given a change in food prices,farmers are typically able to respond rapidly with a change in output.

Accepted Answer

A) True 
 B)False

Question 2

Prices of farm products are

Accepted Answer

A)  Very stable in the short run.
B)  Subject to short-term swings.
C)  Below the market equilibrium price because of price support programs.D) A) and B)
E) None of the above

Question 3

Because there are 2 million farms in the United States,individual farmers have some market power.

Accepted Answer

A) True 
 B)False

Question 4

If an agricultural market is perfectly competitive,then

Accepted Answer

A)  A farmer is a price taker.
B)  A farmer practices price discrimination.
C)  The market demand curve is perfectly elastic.D) None of the above
E) All of the above

Question 5

If a price support is maintained above the equilibrium price,the result will be a

Accepted Answer

A)  Market price that is too low.
B)  Market price equal to the equilibrium price.
C)  Surplus of the product.D) None of the above
E) B) and C)

Question 6

From the early 1900s to 2007,the ratio of farm prices to nonfarm prices

Accepted Answer

A)  Decreased 60 percent.
B)  Increased 60 percent.
C)  Decreased 25 percent.D) A) and C)
E) All of the above

Question 7

The major problems confronting U.S.agriculture are the downward trend in relative farm prices and abrupt short-term swings in prices.

Accepted Answer

A) True 
 B)False

Question 8

Today,as a result of government policies,about 25 percent of all farm output is either destroyed or stored.

Accepted Answer

A) True 
 B)False

Question 9

A bumper crop of apples can lead to sharply lower market prices and a decline in earned farm income primarily because

Accepted Answer

A)  The demand for apples is price-inelastic.
B)  Foreign exports of apples to the United States should increase.
C)  The income elasticity of demand for apples is negative.D) All of the above
E) B) and C) A

Question 10

The price elasticity of demand for food is

Accepted Answer

A)  Perfectly inelastic.
B)  Relatively inelastic.
C)  Relatively elastic.D) A) and B)
E) All of the above B

Question 11

In 2010 how much could a wheat farmer borrow for every bushel of wheat relinquished to the Commodity Credit Corporation (CCC) ?

Accepted Answer

A)  $1.95.
B)  $2.94.
C)  $3.00.D) All of the above
E) B) and C)

Question 12

Response lags

Accepted Answer

A)  Reduce short-term price instability.
B)  Increase short-term price instability.
C)  Slow the long-term downward trend in farm prices.D) A) and B)
E) A) and C)

Question 13

Explain why the prices of farm products are subject to abrupt short-term swings.

Accepted Answer

The prices of farm products are subject to abrupt short-term swings because good weather can lead to large harvests and severe price drops,whereas bad weather can lead to small harvests and severe price increases.In addition,there are time lags that intensify short-term price swings.

Question 14

Which of the following is true for the agriculture market?

Accepted Answer

A)  The law of demand does not apply.
B)  Individual farmers face a horizontal demand curve.
C)  Individual farmers face a vertical demand curve.D) A) and B)
E) None of the above

Question 15

Which program forces farmers to destroy millions of dollars' worth of crops each year?

Accepted Answer

A)  Marketing orders.
B)  Set-asides.
C)  The dairy termination program.D) A) and B)
E) A) and C)

Question 16

The advantage of direct income supports is that they

Accepted Answer

A)  Provide income security without distorting market prices and output.
B)  Raise market prices.
C)  Increase market output.D) A) and B)
E) A) and C)

Question 17

Agriculture industries are notorious for having barriers to entry.

Accepted Answer

A) True 
 B)False

Question 18

When interest rates rise,the debt burden for farmers

Accepted Answer

A)  Rises and the value of their land falls.
B)  Falls and the value of their land falls.
C)  Rises and the value of their land rises.D) A) and C)
E) A) and B)

Question 19

The relationship between farm and nonfarm prices that existed during the period from 1910 to 1914 is known as

Accepted Answer

A)  The payment-in-kind program.
B)  The target price.
C)  The farm parity price.D) A) and C)
E) A) and B)

Question 20

Suppose European incomes increase annually by 4 percent per year,and as a result,U.S.farm exports to Europe rise by 2 percent annually.The U.S.farm exports are

Accepted Answer

A)  Inferior goods.
B)  Normal goods.
C)  Price-elastic.D) All of the above
E) None of the above

Exam 29: The Farm Problem

Given a change in food prices,farmers are typically able to respond rapidly with a change in output.

Correct Answer
verified

Prices of farm products are

Correct Answer
verified

Because there are 2 million farms in the United States,individual farmers have some market power.

Correct Answer
verified

If an agricultural market is perfectly competitive,then

Correct Answer
verified

If a price support is maintained above the equilibrium price,the result will be a

Correct Answer
verified

From the early 1900s to 2007,the ratio of farm prices to nonfarm prices

Correct Answer
verified

The major problems confronting U.S.agriculture are the downward trend in relative farm prices and abrupt short-term swings in prices.

Correct Answer
verified

Today,as a result of government policies,about 25 percent of all farm output is either destroyed or stored.

Correct Answer
verified

A bumper crop of apples can lead to sharply lower market prices and a decline in earned farm income primarily because

Correct Answer
verified
A

The price elasticity of demand for food is

Correct Answer
verified
B

In 2010 how much could a wheat farmer borrow for every bushel of wheat relinquished to the Commodity Credit Corporation (CCC) ?

Correct Answer
verified

Response lags

Correct Answer
verified

Explain why the prices of farm products are subject to abrupt short-term swings.

Which of the following is true for the agriculture market?

Correct Answer
verified

Which program forces farmers to destroy millions of dollars' worth of crops each year?

Correct Answer
verified

The advantage of direct income supports is that they

Correct Answer
verified

Agriculture industries are notorious for having barriers to entry.

Correct Answer
verified

When interest rates rise,the debt burden for farmers

Correct Answer
verified

The relationship between farm and nonfarm prices that existed during the period from 1910 to 1914 is known as

Correct Answer
verified

Suppose European incomes increase annually by 4 percent per year,and as a result,U.S.farm exports to Europe rise by 2 percent annually.The U.S.farm exports are

Correct Answer
verified

Exam 29: The Farm Problem

Given a change in food prices,farmers are typically able to respond rapidly with a change in output.

Correct AnswerverifiedShow Answer

Prices of farm products are

Correct AnswerverifiedShow Answer

Because there are 2 million farms in the United States,individual farmers have some market power.

Correct AnswerverifiedShow Answer

If an agricultural market is perfectly competitive,then

Correct AnswerverifiedShow Answer

If a price support is maintained above the equilibrium price,the result will be a

Correct AnswerverifiedShow Answer

From the early 1900s to 2007,the ratio of farm prices to nonfarm prices

Correct AnswerverifiedShow Answer

The major problems confronting U.S.agriculture are the downward trend in relative farm prices and abrupt short-term swings in prices.

Correct AnswerverifiedShow Answer

Today,as a result of government policies,about 25 percent of all farm output is either destroyed or stored.

Correct AnswerverifiedShow Answer

A bumper crop of apples can lead to sharply lower market prices and a decline in earned farm income primarily because

Correct AnswerverifiedA

The price elasticity of demand for food is

Correct AnswerverifiedB

In 2010 how much could a wheat farmer borrow for every bushel of wheat relinquished to the Commodity Credit Corporation (CCC) ?

Correct AnswerverifiedShow Answer

Response lags

Correct AnswerverifiedShow Answer

Explain why the prices of farm products are subject to abrupt short-term swings.

Which of the following is true for the agriculture market?

Correct AnswerverifiedShow Answer

Which program forces farmers to destroy millions of dollars' worth of crops each year?

Correct AnswerverifiedShow Answer

The advantage of direct income supports is that they

Correct AnswerverifiedShow Answer

Agriculture industries are notorious for having barriers to entry.

Correct AnswerverifiedShow Answer

When interest rates rise,the debt burden for farmers

Correct AnswerverifiedShow Answer

The relationship between farm and nonfarm prices that existed during the period from 1910 to 1914 is known as

Correct AnswerverifiedShow Answer

Suppose European incomes increase annually by 4 percent per year,and as a result,U.S.farm exports to Europe rise by 2 percent annually.The U.S.farm exports are

Correct AnswerverifiedShow Answer

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A

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B

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