Question 1

The price parity concept, which is a cornerstone of U.S.agricultural policy, was established by the

Accepted Answer

The price parity concept was established by the Agricultural Adjustment Act of 1933, which was a New Deal-era law passed by President Franklin D. Roosevelt's administration in response to the Great Depression. This act created the Agricultural Adjustment Administration, which was responsible for implementing policies to raise agricultural prices and reduce surpluses. The price parity concept established a target price for agricultural goods based on their production costs, allowing farmers to receive a fair price for their products and helping to stabilize agricultural markets.

Question 2

If the parity ratio goes from 0.8 to 0.7, it means that the prices received by farmers had

Accepted Answer

The parity ratio is calculated by dividing the prices received by farmers by the prices paid by farmers. A decrease in the parity ratio from 0.8 to 0.7 means that the prices received by farmers have decreased in comparison to the prices they pay. To calculate the percentage change, we can use the following formula:

% change = (new value - old value) / old value * 100%

% change = (0.7 - 0.8) / 0.8 * 100% = -12.5%

Therefore, the prices received by farmers have fallen by 12.5% relative to the prices they paid. The answer is A.

Question 3

Which of the following statements describes how a price-change in a purely competitive market would eliminate the surplus of an agricultural commodity?

Accepted Answer

The answer of Which of the following statements describes how...

Question 4

The government's promotion of greater production and use of corn-based ethanol was intended to

Accepted Answer

The government's promotion of greater production and use of corn-based ethanol was intended to bolster the demand for corn. This was seen as a way to support American farmers and reduce reliance on foreign oil.

Question 5

If price supports are established and producers are producing more than consumers want to buy at that price, to maintain producers' income the government will have to

Accepted Answer

If price supports have already been established and producers are producing more than consumers want to buy at that price, reducing price supports or restricting output would only exacerbate the problem. Increasing price supports would also not solve the issue because it would not address the oversupply problem. Buying the surplus, however, would remove the excess supply from the market and help support producers' income.

Question 6

Because the demand for agricultural products is price-inelastic, price support programs tend to

Accepted Answer

Price inelasticity means that changes in price do not significantly affect the quantity of products demanded. Therefore, even if the government sets a higher price through price support programs, the demand for agricultural products will remain relatively constant, which will result in an increase in farm income.

Question 7

A declining parity ratio implies that the

Accepted Answer

The answer of A declining parity ratio implies that the
...

Question 8

The price of a certain farm product was $1.25 in the base period when the parity ratio was 100.If the index of prices paid by farmers is now at 140, then the parity price of this farm product today should be

Accepted Answer

The answer of The price of a certain farm product...

Question 9

Facets of the U.S.government's ethanol program include the following, except

Accepted Answer

The U.S. government's ethanol program includes tariffs on imported ethanol, mandated use of ethanol in gasoline, and subsidies to ethanol producers or blenders, but there is no price-ceiling to reduce the price of corn needed to make ethanol. In fact, the demand for corn has been one of the driving forces behind the ethanol program, as corn is the primary feedstock for domestic ethanol production.

Question 10

Acreage allotments, which limit the number of acres planted with a particular crop, have an effect on the crop's price that is

Accepted Answer

Acreage allotments limit the supply of a particular crop, which can help support its price by reducing the amount available on the market. This is consistent with a price-support program, which aims to keep prices at a certain level by reducing the supply of the product.

Question 11

Government and private efforts to promote the production of "gasohol" using corn-based ethanol are an attempt to

Accepted Answer

Government and private efforts to promote the production of "gasohol" using corn-based ethanol is aimed at increasing the demand for certain farm products, namely corn. This helps to support farmers and the agricultural industry, and also reduces dependence on foreign oil.

Question 12

A decrease in the quantity of soybeans produced could result from

Accepted Answer

Elimination of subsidies would make soybean production less profitable for farmers, which could lead to a decrease in the quantity produced. B, C, and D would likely have the opposite effect and increase the quantity of soybeans produced.

Question 13

Comparing an acreage allotment program versus a taxpayer-subsidized price-support program, the acreage allotment program

Accepted Answer

An acreage allotment program limits the amount of crops a farmer can grow on a certain amount of land, which can lead to reduced supply and increased prices for consumers. However, this program does not directly cost taxpayers money. On the other hand, a taxpayer-subsidized price-support program involves the government buying surplus crops from farmers at a guaranteed minimum price, which can lead to higher taxes for taxpayers. Therefore, the acreage allotment program imposes a smaller cost on taxpayers compared to the price-support program.

Question 14

The agricultural price support program in the United States has resulted in

Accepted Answer

The agricultural price support program in the United States has resulted in surpluses of price-supported farm commodities, as the government guarantees a minimum price for certain agricultural products, resulting in overproduction and a surplus of those products. This surplus often leads to government intervention in the form of subsidies, purchases, or export programs to stabilize prices and sales.

Question 15

In a purely competitive market, how would a surplus of a product be eliminated?

Accepted Answer

In a purely competitive market, a surplus of a product occurs when the quantity supplied exceeds the quantity demanded at the current price. In order to eliminate the surplus, producers would have to lower the price of the product to encourage more consumers to buy it. This increase in demand would help to match the quantity supplied with the quantity demanded, thereby eliminating the surplus.

Question 16

If government establishes a system of price supports, it is in effect setting a

Accepted Answer

When the government establishes a system of price supports, it sets a minimum price floor for a specific commodity, product or service, often for goods like agricultural products, to ensure that producers can receive a fair price and cover their costs of production.

Question 17

The federal government has tried to eliminate agricultural surpluses by

Accepted Answer

The federal government typically tries to eliminate agricultural surpluses by decreasing supply through measures like production quotas and increasing demand through subsidies or incentives to boost consumption.

Question 18

Which of the following illustrates the basic idea of "parity" as a cornerstone of U.S.agricultural policy?

Accepted Answer

Parity in U.S. agricultural policy refers to the idea that farmers should receive the same purchasing power for their goods as they did in a base period. Therefore, the exchange rate between agricultural products and other goods should remain constant over time. Choice C illustrates this basic idea by stating that the rate of exchange between a bushel of corn and a pair of pants should remain the same as it was in a previous time.

Question 19

Which of the following is not a goal of the "parity concept" in U.S.agriculture policy?

Accepted Answer

The answer of Which of the following is not a...

Question 20

The concept of parity in farm policy implies that

Accepted Answer

The answer of The concept of parity in farm policy...

Quiz 22: Agriculture: Economics and Policy