Multiple Choice Quiz


1	Farm prices are generally ______ than they were in the 1950s
		A)	higher in inflation-adjusted terms
		B)	lower in inflation-adjusted terms
		C)	lower in nominal terms
		D)	the same in inflation-adjusted terms


2	Which of the following arguments gains support among some economists
		A)	the argument that price is always too low.
		B)	the argument that price is always too high.
		C)	the argument that family farms are necessary for a health market.
		D)	the argument that price variability needs to be dampened by government.


3	Which of the following ways of subsidizing farmers has prices to consumers lower than they would be without farm subsidies
		A)	buying up excess stocks.
		B)	paying farmers not to farm.
		C)	making up the difference in price between market and the subsidized level.
		D)	b) and c)


4	Which is generally true about farm price supports
		A)	consumers are better off.
		B)	farmers are better off.
		C)	society is better off .
		D)	taxpayers are better off.


5	A price _______ exists when the supported price is above the equilibrium price
		A)	floor
		B)	ceiling
		C)	level
		D)	state


6	Which of the following occurs when there is a price support
		A)	consumer surplus is increased.
		B)	producer surplus is increased.
		C)	the sum of producer surplus and consumer surplus increases.
		D)	the sum of producer surplus and consumer surplus remains the same.


7	The Eau Claire rule deals with what commodity
		A)	corn
		B)	soybeans
		C)	milk
		D)	cheese


8	Without price supports in farming there would very likely be
		A)	fewer farmers.
		B)	lower prices.
		C)	a) and b)
		D)	neither a) nor b)


9	Price supports began in the
		A)	1850s.
		B)	1930s.
		C)	1970s.
		D)	1990s.


10	In the middle 1980s milk price supports were such that the government was buying excess milk at great expense. To change that the government chose to
		A)	end price supports.
		B)	buy up herds and send them to slaughter.
		C)	buy up herds and send them to the Montana prairie to live in the wild.
		D)	sell government herds to farmers to increase production.

2003 McGraw-Hill Higher Education
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of The McGraw-Hill Companies.