Question 1

A shift of the supply curve for farm products to the right in a price inelastic region of the demand curve for farm products

Accepted Answer

When supply increases (shifts right) in a price inelastic region of the demand curve, the price decreases, and because demand is inelastic, total revenue also decreases.

Question 2

Supply-restricting policies are intended to shift the

Accepted Answer

Supply-restricting policies, such as quotas and tariffs, are designed to limit the amount of a good or service that can be produced or imported, which results in a decrease in supply and shifts the supply curve to the left.

Question 3

Exhibit 39-2 -Refer to Exhibit 39-2.Given a target price of P₁,what is the total deficiency payment made by the government?

Accepted Answer

The deficiency payment made by the government is calculated as the difference between the target price and the actual market price, multiplied by the quantity of the commodity produced. Therefore, the formula for deficiency payment is (Target price - Market price) x Quantity produced. In this case, the target price is P₁ and the market price is P₂. Therefore, the deficiency payment would be (P₁ - P₂) x Q₂. Option A matches this formula and is therefore the correct choice.

Question 4

Exhibit 39-2 -Refer to Exhibit 39-2.If P₁ is a price support,the cost of the price support program to the government is

Accepted Answer

According to the exhibit, P₁ is the price support per unit, Q₂ is the quantity demanded and Q₁ is the quantity supplied. The cost of the price support program to the government is the difference between the market price and the price support multiplied by the quantity supplied with the price support. Therefore, the correct formula is P₁ x (Q₂ - Q₁), which is choice D.

Question 5

Exhibit 39-2 -Refer to Exhibit 39-2.Given a target price of P₁,what price does the consumer pay?

Accepted Answer

The answer of Exhibit 39-2 
-Refer to Exhibit 39-2.Given a...

Question 6

The effect of a drought on the price of an agricultural product will be greater the more __________ the demand for the agricultural product.

Accepted Answer

When demand is price inelastic, a decrease in supply due to a drought will lead to a larger increase in price because consumers are less responsive to price changes.

Question 7

Exhibit 39-2 -Refer to Exhibit 39-2.If P₁ is a price support,the quantity of wheat purchased by the market would be equal to

Accepted Answer

P₁ represents a price support where the price of wheat is kept at a certain level, in this case, '11'. Q₁ represents the quantity of wheat demanded at this price level. Therefore, the quantity of wheat purchased by the market would be equal to Q₁.

Question 8

Increased productivity in the agricultural sector in conjunction with an inelastic demand curve for agricultural goods has caused a(n)__________ in output,a(n)__________ in price,and __________ revenues for farmers.

Accepted Answer

Increased productivity leads to an increase in output, but with an inelastic demand curve, the increase in supply does not lead to a proportionate increase in demand, resulting in a decrease in price. Lower prices result in lower revenues for farmers despite the increase in output. Therefore, the best choice is B, i.e., an increase in output, a decrease in price, and lower revenues for farmers.

Question 9

The acreage allotment program involves

Accepted Answer

The acreage allotment program involves no direct payments to farmers; it is a system where the government sets limits on the amount of acreage that can be used for certain crops to control supply and stabilize prices.

Question 10

Supply-restricting policies are intended to __________ prices and __________ farmers' revenues.

Accepted Answer

Supply-restricting policies aim to decrease the supply of a product, which typically raises prices due to scarcity, thereby increasing farmers' revenues.

Question 11

Exhibit 39-1 -Refer to Exhibit 39-1.At the support price of P_T,how many units of the good must the government buy and store?

Accepted Answer

At the support price P_T, the government must buy and store the surplus, which is the difference between the quantity supplied (Q₂) and the quantity demanded (Q₃).

Question 12

Exhibit 39-1 -Refer to Exhibit 39-1.Given the target price P_T,the total deficiency payment made by the government is the area of

Accepted Answer

The total deficiency payment is the difference between the target price (P_T) and the market price (P₁) for the quantity produced (Q₂), represented by the area P_TBCP₁.

Question 13

A decrease in the supply of an agricultural product will increase the total revenue of farmers if the demand for the agricultural product is

Accepted Answer

When the supply of an agricultural product decreases, the price of the product will increase. If the demand for the product is price inelastic, then farmers will experience an increase in total revenue as the increase in price will more than offset the decrease in quantity sold.  On the other hand, if the demand for the product is price elastic, then the increase in price will result in a greater decrease in the quantity demanded, leading to a decrease in total revenue for farmers.

Question 14

Exhibit 39-2 -Refer to Exhibit 39-2.If P₁ is a price support,the quantity of wheat purchased by the government would be equal to

Accepted Answer

When the government sets a price support at P1, it buys the surplus wheat, which is the difference between the quantity supplied (Q2) and the quantity demanded (Q1).

Question 15

An increase in productivity in the agricultural sector when the demand curve is inelastic results in __________ prices for consumers and __________ revenues for farmers

Accepted Answer

When productivity increases, supply increases, leading to lower prices. With inelastic demand, the percentage drop in price is greater than the percentage increase in quantity sold, resulting in lower total revenue for farmers.

Question 16

Under the target price system,

Accepted Answer

Under the target price system, farmers are paid a deficiency payment if the market price for their goods is below the target price. This is meant to provide a safety net for farmers and stabilize prices for consumers. Consumers are not required to pay the target price and there are no payments made to the government if the price paid by consumers rises above the target price.

Question 17

Increased productivity in the agricultural sector has __________ the output and __________ the prices of agricultural goods.

Accepted Answer

Increased productivity typically leads to higher output due to more efficient production processes, which often results in reduced prices due to the increased supply of goods.

Question 18

Exhibit 39-1 -Refer to Exhibit 39-1.At a support price of P_T,private sector spending on this good equals

Accepted Answer

At a support price of P_T, the quantity demanded is Q₃. Therefore, private sector spending on this good equals P_T x Q₃.

Question 19

In general,agricultural price supports

Accepted Answer

Agricultural price supports raise food prices by artificially inflating the cost of goods through subsidies and other methods aimed at supporting agriculture.

Question 20

Agricultural price supports refer to

Accepted Answer

Agricultural price supports refer to minimum prices set by the government on certain farm products to ensure that farmers receive a fair price for their goods and to stabilize the agricultural sector. This usually involves price guarantees, loans, and subsidies to support farmers and prevent price volatility.

Quiz 26: Stocks, bonds, futures, and Options

A shift of the supply curve for farm products to the right in a price inelastic region of the demand curve for farm products

Supply-restricting policies are intended to shift the

Exhibit 39-2 -Refer to Exhibit 39-2.Given a target price of P₁,what is the total deficiency payment made by the government?

Exhibit 39-2 -Refer to Exhibit 39-2.If P₁ is a price support,the cost of the price support program to the government is

Exhibit 39-2 -Refer to Exhibit 39-2.Given a target price of P₁,what price does the consumer pay?

The effect of a drought on the price of an agricultural product will be greater the more __________ the demand for the agricultural product.

Exhibit 39-2 -Refer to Exhibit 39-2.If P₁ is a price support,the quantity of wheat purchased by the market would be equal to

Increased productivity in the agricultural sector in conjunction with an inelastic demand curve for agricultural goods has caused a(n) in output,a(n) in price,and __ revenues for farmers.

The acreage allotment program involves

Supply-restricting policies are intended to prices and farmers' revenues.

Exhibit 39-1 -Refer to Exhibit 39-1.At the support price of P_T,how many units of the good must the government buy and store?

Exhibit 39-1 -Refer to Exhibit 39-1.Given the target price P_T,the total deficiency payment made by the government is the area of

A decrease in the supply of an agricultural product will increase the total revenue of farmers if the demand for the agricultural product is

Exhibit 39-2 -Refer to Exhibit 39-2.If P₁ is a price support,the quantity of wheat purchased by the government would be equal to

An increase in productivity in the agricultural sector when the demand curve is inelastic results in prices for consumers and revenues for farmers

Under the target price system,

Increased productivity in the agricultural sector has the output and the prices of agricultural goods.

Exhibit 39-1 -Refer to Exhibit 39-1.At a support price of P_T,private sector spending on this good equals

In general,agricultural price supports

Agricultural price supports refer to

Quiz 26: Stocks, bonds, futures, and Options

A shift of the supply curve for farm products to the right in a price inelastic region of the demand curve for farm products

Supply-restricting policies are intended to shift the

Exhibit 39-2 -Refer to Exhibit 39-2.Given a target price of P1,what is the total deficiency payment made by the government?

Exhibit 39-2 -Refer to Exhibit 39-2.If P1 is a price support,the cost of the price support program to the government is

Exhibit 39-2 -Refer to Exhibit 39-2.Given a target price of P1,what price does the consumer pay?

The effect of a drought on the price of an agricultural product will be greater the more __________ the demand for the agricultural product.

Exhibit 39-2 -Refer to Exhibit 39-2.If P1 is a price support,the quantity of wheat purchased by the market would be equal to

Increased productivity in the agricultural sector in conjunction with an inelastic demand curve for agricultural goods has caused a(n) __________ in output,a(n) __________ in price,and __________ revenues for farmers.

The acreage allotment program involves

Supply-restricting policies are intended to __________ prices and __________ farmers' revenues.

Exhibit 39-1 -Refer to Exhibit 39-1.At the support price of PT,how many units of the good must the government buy and store?

Exhibit 39-1 -Refer to Exhibit 39-1.Given the target price PT,the total deficiency payment made by the government is the area of

A decrease in the supply of an agricultural product will increase the total revenue of farmers if the demand for the agricultural product is

Exhibit 39-2 -Refer to Exhibit 39-2.If P1 is a price support,the quantity of wheat purchased by the government would be equal to

An increase in productivity in the agricultural sector when the demand curve is inelastic results in __________ prices for consumers and __________ revenues for farmers

Under the target price system,

Increased productivity in the agricultural sector has __________ the output and __________ the prices of agricultural goods.

Exhibit 39-1 -Refer to Exhibit 39-1.At a support price of PT,private sector spending on this good equals

In general,agricultural price supports

Agricultural price supports refer to

Exhibit 39-2 -Refer to Exhibit 39-2.Given a target price of P₁,what is the total deficiency payment made by the government?

Exhibit 39-2 -Refer to Exhibit 39-2.If P₁ is a price support,the cost of the price support program to the government is

Exhibit 39-2 -Refer to Exhibit 39-2.Given a target price of P₁,what price does the consumer pay?

Exhibit 39-2 -Refer to Exhibit 39-2.If P₁ is a price support,the quantity of wheat purchased by the market would be equal to

Increased productivity in the agricultural sector in conjunction with an inelastic demand curve for agricultural goods has caused a(n) in output,a(n) in price,and __ revenues for farmers.

Supply-restricting policies are intended to prices and farmers' revenues.

Exhibit 39-1 -Refer to Exhibit 39-1.At the support price of P_T,how many units of the good must the government buy and store?

Exhibit 39-1 -Refer to Exhibit 39-1.Given the target price P_T,the total deficiency payment made by the government is the area of

Exhibit 39-2 -Refer to Exhibit 39-2.If P₁ is a price support,the quantity of wheat purchased by the government would be equal to

An increase in productivity in the agricultural sector when the demand curve is inelastic results in prices for consumers and revenues for farmers

Increased productivity in the agricultural sector has the output and the prices of agricultural goods.

Exhibit 39-1 -Refer to Exhibit 39-1.At a support price of P_T,private sector spending on this good equals