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| 1 | |
The Agricultural Adjustment Act of 1933: |
| | A) | allowed individuals to acquire farmland from the federal government if they consented to "homestead" |
| | B) | began the federal practice of subsidizing crops produced for export |
| | C) | established maximum prices farmers have to pay for fertilizer, seed, and other basic inputs |
| | D) | established the parity concept as a basis for agricultural policy |
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| 2 | |
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 inelastic |
| | C) | increase because demand is inelastic |
| | D) | decrease because demand is inelastic |
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| 3 | |
The demand for most agricultural products: |
| | A) | has decreased over time as incomes have increased |
| | B) | has increased at the same rate as the increase in the population |
| | C) | has increased slower than the increase in supply |
| | D) | is elastic |
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| 4 | |
All of the following are outcomes of U.S. farm price supports, except: |
| | A) | world agricultural prices increase |
| | B) | tariffs or quotas are necessary to prevent increased imports of agricultural products |
| | C) | higher taxes are required to pay for government purchases of surplus production |
| | D) | export earnings of developing countries are reduced |
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| 5 | |
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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| 6 | |
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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| 7 | |
If in a certain year the indices of prices received and paid by farmers were 120 and 150, respectively, the parity ratio would be: |
| | A) | 30 |
| | B) | 125 |
| | C) | 20 |
| | D) | 80 |
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| 8 | |
U.S. agricultural price supports: |
| | A) | increase domestic quantity demanded |
| | B) | make domestic demand more inelastic |
| | C) | disproportionately benefit large farmers |
| | D) | reduce agricultural imports |
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| 9 | |
The average income of farm households is substantially below that of non-farm households. |
| | A) | True |
| | B) | False |
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| 10 | |
For farm products in the aggregate, demand elasticity is between: |
| | A) | .01 and .02 |
| | B) | .2 and .25 |
| | C) | .9 and 1.0 |
| | D) | 1.5 and 1.6 |
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