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| 1 | |
Use the following diagram to answer the next question.
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Refer to the diagram. Qp, Qn and Qb correspond to poor, normal, and bumper crop levels, respectively. Compared to a normal year, if farmers produce a bumper crop, gross farm income will: |
| | A) | increase because demand is elastic. |
| | B) | decrease because demand is elastic. |
| | C) | increase because demand is inelastic. |
| | D) | decrease because demand is inelastic. |
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| 2 | |
For most agricultural products, demand: |
| | A) | has generally trended downward over time as incomes have increased. |
| | B) | has remained constant even as the population has increased. |
| | C) | has generally increased more slowly than the increase in supply. |
| | D) | is elastic. |
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| 3 | |
In 1994, the nations belonging to the World Trade Organization agreed to reduce farm price support programs in order to: |
| | A) | increase the amount of money available for foreign aid. |
| | B) | reduce agricultural overproduction by developing countries. |
| | C) | reduce economic distortions and international misallocation of agricultural resources. |
| | D) | reduce government deficits worldwide. |
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| 4 | |
The 1996 law ending price supports on wheat, corn, and other crops was known as the: |
| | A) | Parity Act. |
| | B) | Freedom to Farm Act. |
| | C) | Farm Act. |
| | D) | Farmer Independence Act. |
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| 5 | |
Agricultural price supports based on per-bushel production: |
| | A) | increase domestic quantity demanded. |
| | B) | make domestic demand more inelastic. |
| | C) | disproportionately benefit large farmers. |
| | D) | reduce agricultural imports. |
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| 6 | |
Use the following diagram of the U.S. corn market to answer the next question.
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Refer to the diagram: Prior to 1996, U.S. farm policy would most likely have: |
| | A) | raised price to B, resulting in a surplus. |
| | B) | lowered price to M, resulting in a shortage. |
| | C) | lowered price to M, resulting in a surplus. |
| | D) | left price at A, reflecting a laissez-faire policy. |
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| 7 | |
If in a certain year the indices of prices received and paid by farmers were 140 and 200 respectively, the parity ratio would be: |
| | A) | 30. |
| | B) | 60. |
| | C) | 70. |
| | D) | 1.43. |
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| 8 | |
Use the following diagrams to answer the next question.
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Refer to the diagrams. Which diagram best illustrates the long-run impacts of changes in technology and U.S. population on total farm production and prices? |
| | A) | A |
| | B) | B |
| | C) | C |
| | D) | D |
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| 9 | |
U.S. farmers' incomes are unstable in the short run, primarily owing to: |
| | A) | changes in price support programs with each new congress. |
| | B) | fluctuations in U.S. agricultural imports that have caused wide swings in prices of food products. |
| | C) | swings in crop yields and export demand, coupled with inelastic demand. |
| | D) | rapid changes in technology coupled with slow population growth. |
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| 10 | |
Over the long-run, the number of farm households has declined in part because: |
| | A) | the demand for farm products is price-elastic. |
| | B) | the demand for farm products is inelastic with respect to both price and income. |
| | C) | farm productivity has increased at a much slower pace than in the manufacturing and service sectors. |
| | D) | government policies have resulted in chronic shortages in critical markets. |
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