Deck 17: Agricultural Market Interactions and Reforms

Question 1

How do quantitative export restrictions and an equivalent export tax rate differ?

A) There is no difference
B) Under an export tax money is generated for the government and with a quantitative restriction money is generated for domestic consumers
C) Under an export tax money is generated for the government and with a quantitative restriction money is generated for domestic exporters
D) Under an export tax money is generated for exporters and with quantitative restrictions money is generated for the government.

Answer 1

C

Question 2

When a marketing board pays farmers an administered producer price less than the local export price (LEP)it is _____________?

A) Explicitly subsidizing farmers
B) Explicitly taxing famers
C) Implicitly subsidizing farmers
D) Implicitly taxing farmers

Answer 2

D

Question 3

Pan-territorial pricing encourages a shift in the geographic distribution of export crop production from _______ to ________ remote locations and a redistribution of income from _____ remote to ______ remote producers.

A) More; less; less; more
B) More; less; more; less
C) Less; more; less; more
D) Less; more; more; less

Answer 3

C

Question 4

As a result of agricultural pricing policies prices paid by consumers may______ and the price received by producers may________.

A) Increase; decrease
B) Decrease; increase
C) stay the same; increase
D) stay the same; stay the same

Question 5

When governments impose import quotas,they require______.

A) Importers to obtain licenses for importing,and grant only a limited number
B) Exporters to obtain licenses for exporting,and grant only a limited number
C) Consumers to obtain licenses for purchasing goods producing abroad
D) Sellers to obtain licenses for selling imported goods.

Question 6

When governments build up a buffer stock,they are attempting to:

A) Cause shortages
B) Cause surpluses
C) Stabilize prices
D) End shortages and surpluses

Question 7

A uniform increase in the price of a good ______ the real income (and well-being)of households that are net _____ of it and ______ the real income of households that are net _______.

A) lowers; sellers; raises; buyers
B) lowers; sellers; reduces; buyers
C) raises; buyers; raises; sellers
D) raises; sellers; reduces; buyers

Question 8

When governments tax,subsidize or regulate market transactions they are _________ in the market

A) disturbing
B) interrupting
C) intervening
D) improving

Question 9

Which of the following spillover effects from a price increase would be a negative?

A) Increased wages reduce profits
B) If aggregate income rises then demand for all other normal goods increase
C) Increase in demand for complimentary non-labor tools
D) Decreased wages increase profits

Question 10

Policies that lower consumer prices relative to free-market levels are said to impart___________.

A) Consumer surplus
B) Producer subsidies
C) Free-market subsidies
D) General consumer subsidies

Question 11

Developing countries tend to ________ agriculture,while developed countries tend to _______ agriculture,keeping prices down and ____________ export profits of developing countries.

A) Tax; subsidize; limiting
B) Subsidize; subsidize; limiting
C) Tax; tax; encouraging
D) Subsidize; tax; limiting

Question 12

In the 1930s,1940s and 1950s many developing countries intervened in agricultural markets in order to _________.

A) Keep food prices down for the poor
B) Keep food prices high to benefit farmers
C) Keep food prices down for urban workers
D) Encourage growth in export businesses

Question 13

When governments set up a marketing board:

A) They give rights to buy and sell crops to a private business enterprise
B) It is intervening in a more comprehensive way,granting a state owned entity the exclusive rights to buy and sell crops
C) They are attempting to raise the price that seller receive for their crops
D) They are giving farms the option to sell directly to foreign buyers

Question 14

A household,that is net buyer of a good,experiences an increase in the price and responds by consuming less of this and other goods shows:

A) The substitution effect
B) The income effect
C) The liquidity effect
D) The intra-household effect

Question 15

Taxes that are assigned as percentages of total sales value are known as ________.

A) Unit taxes
B) Excise taxes
C) Ad valorem taxes
D) Lump-sum taxes

Question 16

When explicit export taxes are imposed on exports the results is that export crop's domestic price will________.This new tax effectively ________domestic producers and ___________domestic consumers.

A) Decrease; taxes; subsidizes
B) Decrease; subsidizes; taxes
C) Increase; taxes; subsidizes
D) Increase; subsidizes taxes

Question 17

The net effect of a good's price increase on total real income in a region is to ____ total real income if the region is a net ________,implying that total production in the region exceeds total consumption.

A) Raise; exporter
B) Raise; importer
C) Lower; exporter
D) Lower; importer

Question 18

Policies are said to provide consumers with ________ subsidy when the costs of the consumer subsidy are borne by the marketing board.Policies are said to provide consumers with _______ subsidy when governments push some or all of the cost of the consumer subsidy onto domestic producers.

A) General; producer
B) Implicit; explicit
C) Consumer; general
D) Explicit; implicit

Question 19

Which of the following results of a price increase is most likely to lead to an increase in economic growth?

A) One time changes in the level of income
B) Profound changes to the distribution of income
C) A significant increase in efficiency improvements
D) One time increase in wages

Question 20

The sizes of an export tax's impacts on production,consumption,exports and the government budget depend on what primarily?

A) The autarky price
B) Elasticities of the local supply and demand schedules
C) The world price
D) Whether there is a world shortage or surplus for that crop

Question 21

How can an increase in the price of a good introduce intra-household effects?

Question 22

Discuss the potential benefits and costs of replacing a marketing board with a fully competitive and efficient private marketing sector.

Question 23

All of the following results of a price increase can lead to an increase in economic growth except?

A) Increases in income among liquidity constrained farmers may allow them to climb out of poverty and invest
B) Profound changes to the distribution of income
C) A significant increase in efficiency improvements
D) Allows the country to take better advantage of their comparative advantage

Question 24

How does a quantitative restriction work to limit exports?

A) By maximizing the impact of international demand on the domestic market,it reduces domestic prices,as well as local production and export quantities,while increasing local consumption.
B) It has very different effects as an export tax
C) By limiting the impact of international demand on the domestic market,it reduces domestic prices,as well as local production and export quantities,while increasing local consumption.
D) It decreases production so that both domestic and foreign consumption decreases.

Question 25

What was the experience of reformers in the 1980s and 1990s in Asia,Africa and the former Soviet Union

A) Asia experienced the expected growth,the former Soviet Union surpassed expectations and Africa grew less than expected
B) Asia experienced the expected growth,the former Soviet Union did not grow at all and Africa's growth was negative
C) Asia experienced the less than their expected growth,the former Soviet Union did not grow at all and Africa's growth was positive but minimal
D) Asia experienced the expected growth,the former Soviet Union experienced negative growth and Africa's growth was positive but minimal

Question 26

The model of profit-maximizing production decisions suggests that if fertilizer is an important input to rice production,then an increase in the fertilizer price _________ the quantity of rice that farmers _______ to the market at any price,shifting the local rice supply schedule to the ________.

A) Reduces; supply; left
B) Increases; supply; right
C) Increases; demand; left
D) Reduces; demand; left

Question 27

The analysis of a policy design change is __________ complicated than the analysis of a reform because a policy change involves ________changes.

A) More; one or a small number of
B) More; many
C) Less; the same number of
D) Less; many

Question 28

How can increasing the export tax rate may even cause tax revenue to fall?