Question 1

Environmentalists generally support price supports because these subsidies motivate additional farm production.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an effect of the domestic sugar program of the United States on many of the less-developed countries that export sugar?

Accepted Answer

A)  Export earnings and national incomes have increased.
B)  The decrease in the supply of sugar to world markets from less-developed countries has increased world prices.
C)  There has been an increase in the production of sugar in the United States and a loss of sales by less-developed countries to the United States.
D)  There has been improved efficiency in the allocation of agricultural resources.E) All of the above
F) B) and D)

Question 3

Which of the following arguments is not generally made to justify farm subsidies?

Accepted Answer

A)  The "family farm" is an American institution that should be protected and nurtured.
B)  Agribusiness firms need subsidies to achieve economies of scale.
C)  Farmers sell their output in purely competitive markets but must buy inputs from imperfectly competitive firms.
D)  Farmers cannot fully insure themselves against the risks unusual to farming, such as floods, droughts, and pests.E) A) and B)
F) A) and C)

Question 4

The amount of capital used per farmworker increased by how much from 1930 to 1980?

Accepted Answer

A)  double
B)  fivefold
C)  tenfold
D)  fifteen-foldE) None of the above
F) All of the above

Question 5

Farmers typically sell their products in highly competitive markets and buy in imperfectly competitive markets.

Accepted Answer

A) True 
 B)False

Question 6

Ward Planter exclusively grew soybeans from 2011 to 2013 and participated in the marketing loan program of the Food, Conservation, and Energy Act of 2008.If the "crop price" of soybeans at harvest was less than the preharvest "loan price," Planter could

Accepted Answer

A)  sell his crop in the market and receive the difference between the crop price and loan price as a direct payment from the federal government.
B)  take a "crop credit" based on the difference between the crop price and the loan price and use the credit to reduce federal income taxes owed.
C)  receive an "emergency loan" that could be paid back over the following five years.
D)  forfeit the harvest to the lender and be free of the loan, thus receiving a subsidy because the proceeds from the loan exceeded the revenues from the sale of the crop in the market.E) All of the above
F) B) and C)

Question 7

The farm price-support programs hurt consumers of the farm products, and moreover, the burden tends to be disproportionately heavier on the low-income consumers.

Accepted Answer

A) True 
 B)False

Question 8

The 2014 Agriculture Act aims to achieve the following, except

Accepted Answer

A)  maintain or protect dairy farmersâ€™ per-unit margin from milk.
B)  reduce the risk of price and revenue variability.
C)  stabilize the incomes of farmers to counter the unpredictable nature of farming.
D)  get some resources to leave farming and move into other productive sectors.E) A) and B)
F) A) and C)

Question 9

Under the Food, Conservation, and Energy Act of 2008, subsidies to farmers based on gaps between actual prices of crops and targeted prices were called

Accepted Answer

A)  direct payments.
B)  price supports.
C)  countercyclical payments.
D)  price gap set-asides.E) B) and C)
F) None of the above

Question 10

Domestic farm subsidies improve world trade and contribute to greater efficiency in the international allocation of agricultural resources.

Accepted Answer

A) True 
 B)False

Question 11

Which group of farmers benefits the least from price supports in agriculture?

Accepted Answer

A)  those farmers receiving the highest average farm-family income
B)  those farmers receiving the midrange average farm-family income
C)  those farmers receiving the lowest average farm-family income
D)  large corporate farmsE) All of the above
F) A) and B)

Question 12

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

Accepted Answer

A)  price ceilings for farm products.
B)  agricultural research.
C)  farm crop insurance.
D)  soil and water conservation.E) A) and B)
F) B) and C)

Question 13

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 14

In which of the following countries do farmers receive the largest percentage of their incomes as government subsidies?

Accepted Answer

A)  Switzerland
B)  Mexico
C)  Canada
D)  United StatesE) C) and D)
F) All of the above

Question 15

Overproduction of farm products in the European Community has been primarily the result of

Accepted Answer

A)  low U.S.tariffs on imports of farm products.
B)  subsidies to farmers in the European Community.
C)  increasing world trade in agricultural commodities.
D)  quotas imposed by the European Community on imported products.E) C) and D)
F) A) and B)

Question 16

The Freedom to Farm Act of 1996 aimed to eliminate agricultural price supports and acreage allotments for many crops.

Accepted Answer

A) True 
 B)False

Question 17

Fixed costs faced by farmers typically include the following, except

Accepted Answer

A)  family labor.
B)  fertilizer.
C)  property taxes.
D)  interest and rent payments.E) C) and D)
F) B) and C)

Question 18

A bumper crop of farm products causes

Accepted Answer

A)  only a slight decline in the price of farm products because the demand for farm products is income inelastic.
B)  a large decline in the price of farm products because the demand for farm products is price inelastic.
C)  only a slight decline in the price of farm products because the demand for farm products is income elastic.
D)  a large decline in the price of farm products because the demand for farm products is price elastic.E) A) and C)
F) A) and B)

Question 19

Most of the technological advances in U.S.agriculture are initiated by the following, except

Accepted Answer

A)  government-sponsored agencies.
B)  farmers.
C)  colleges and universities.
D)  suppliers of farm inputs.E) None of the above
F) A) and C)

Question 20

Agricultural price supports have been criticized because they

Accepted Answer

A)  hasten the exodus of labor from agriculture.
B)  subsidize consumers at the expense of farmers.
C)  help large-scale farmers rather than small farmers.
D)  create product shortages.E) A) and B)
F) A) and D)

Exam 22: Agriculture: Economics and Policy

The farm price-support programs hurt consumers of the farm products, and moreover, the burden tends to be disproportionately heavier on the low-income consumers.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which group of farmers benefits the least from price supports in agriculture?

Correct AnswerverifiedShow Answer

Which of the following arguments is not generally made to justify farm subsidies?

Correct AnswerverifiedShow Answer

A bumper crop of farm products causes

Correct AnswerverifiedShow Answer

Farmers typically sell their products in highly competitive markets and buy in imperfectly competitive markets.

Correct AnswerverifiedShow Answer

The 2014 Agriculture Act aims to achieve the following, except

Correct AnswerverifiedShow Answer

Which of the following is an effect of the domestic sugar program of the United States on many of the less-developed countries that export sugar?

Correct AnswerverifiedShow Answer

Environmentalists generally support price supports because these subsidies motivate additional farm production.

Correct AnswerverifiedShow Answer

Domestic farm subsidies improve world trade and contribute to greater efficiency in the international allocation of agricultural resources.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Most of the technological advances in U.S.agriculture are initiated by the following, except

Correct AnswerverifiedShow Answer

Overproduction of farm products in the European Community has been primarily the result of

Correct AnswerverifiedShow Answer

Fixed costs faced by farmers typically include the following, except

Correct AnswerverifiedShow Answer

The Freedom to Farm Act of 1996 aimed to eliminate agricultural price supports and acreage allotments for many crops.

Correct AnswerverifiedShow Answer

The amount of capital used per farmworker increased by how much from 1930 to 1980?

Correct AnswerverifiedShow Answer

Under the Food, Conservation, and Energy Act of 2008, subsidies to farmers based on gaps between actual prices of crops and targeted prices were called

Correct AnswerverifiedShow Answer

Ward Planter exclusively grew soybeans from 2011 to 2013 and participated in the marketing loan program of the Food, Conservation, and Energy Act of 2008.If the "crop price" of soybeans at harvest was less than the preharvest "loan price," Planter could

Correct AnswerverifiedShow Answer

Agricultural price supports have been criticized because they

Correct AnswerverifiedShow Answer

In which of the following countries do farmers receive the largest percentage of their incomes as government subsidies?

Correct AnswerverifiedShow Answer

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