Question 1

One effect of the changing composition of 20th-Century rural economies was a reduced importance of non-farm income as an earnings source for farm households.

Accepted Answer

Non-farm income increased in importance as an income source for farm households in the 20th-Century.

Question 2

The Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP) are examples of which type of trading arrangement?&#10;A) Customs Unions&#10;B) Common Markets&#10;C) Free Trade Agreements&#10;D) Monetary Unions&#10;E) Economic Unions

Accepted Answer

The TPP and TTIP are both examples of Free Trade Agreements (FTAs), which involve the reduction or elimination of tariffs and other trade barriers between participating countries. They do not establish a common market or economic union, and do not involve the coordination of monetary policies.

Question 3

The Law of Comparative Advantage recommends the net benefits of trade when&#10;A) each trading partner can produce and sell the products where it has respective lower opportunity cost, and then trades for other products.&#10;B) each trading partner can produce and sell the products where it has respective higher opportunity cost, and then trades for other products.&#10;C) each trading partner produces and sells products where their respective opportunity costs are equal, and then trade for other products.&#10;D) each trading partner takes advantage of government subsidies to expand their exports, while relying on import tariffs to prevent the entry of cheaper foreign-made products.&#10;E) None of the above.

Accepted Answer

The Law of Comparative Advantage argues that countries should specialize in producing and exporting goods in which they have a lower opportunity cost than their trading partners. By doing so, they can trade for goods that they would otherwise have to produce domestically at a higher opportunity cost. This leads to an increase in economic efficiency and overall welfare for both trading partners. Therefore, option A is the correct answer. Option B is incorrect because it suggests that countries should specialize in producing and exporting goods in which they have a higher opportunity cost, which would contradict the principle of comparative advantage. Option C is incorrect because if countries produced and sell products where their opportunity cost is equal, there would be no incentive for either country to trade. Option D is incorrect because it suggests that governments should interfere with the free flow of trade by providing subsidies and imposing tariffs, which can lead to inefficient outcomes and a reduction in overall welfare.

Question 4

Both of these are primary examples of organizations or persons who promote trade liberalization on a multinational and/or global scale.&#10;A) the AFL and the CIO&#10;B) the GATT and the WTO&#10;C) Congressmen Smoot and Hawley&#10;D) The United Auto Workers and the Union of Concerned Scientists&#10;E) the National Education Association and the United Food and Commercial Workers Unioin

Accepted Answer

GATT (General Agreement on Tariffs and Trade) and WTO (World Trade Organization) are both international organizations that promote trade liberalization on a global scale by reducing trade barriers such as tariffs and quotas.

Question 5

Which of the following best illustrates the actions that are most consistent with implementing a trade liberalization policy?&#10;A) Creating trade barriers that take the form of higher import/export tariffs or tighter trade quotas.&#10;B) Policies encouraging governments to subsidize domestically-produced goods, therefore making the prices more attactive to foreign buyers.&#10;C) Policies that boost the economic viability of domestic industries by restraining the ability of foreign competitors to gain a share of the domestic market.&#10;D) Negotiating with trade partners to reduce or eliminate trade barriers (e.g., by lowering tariffs, loosening trade quotas, or promoting market-driven currency exchange-rate markets)&#10;E) both answers &#34;&#34;B&#34;&#34; and &#34;&#34;C&#34;&#34; are correct.

Accepted Answer

A trade liberalization policy (or ""free trade"") is a nation's effort to increase international trade (expanding exports and/or imports) by negotiating with trade partners to actively to reduce or eliminate trade barriers (e.g., by lowering tariffs, loosening trade quotas, or promoting market-driven currency exchange-rate markets)

Question 6

Which of the following best illustrates the actions that are most consistent with implementing a trade protectionism policy?&#10;A) Allowing a nation's currency value to &#34;&#34;float freely&#34;&#34; (with no manipulation) in an international exchange market.&#10;B) Negotiating reductions in import/export tariffs as part of a trade agreeement.&#10;C) Creating trade barriers that take the form of higher import/export tariffs or tighter trade quotas.&#10;D) Congress passes the Trade Act of 2015 to allow the president's trade representative to negotiate trade treaties more efficiently and quickly.&#10;E) both answers &#34;&#34;A&#34;&#34; and &#34;&#34;D&#34;&#34; are correct.

Accepted Answer

A trade protectionism policy occurs when a nation intentionally chooses to erect trade barriers to reduce international trade with trading partners. The trade barriers may take the form of higher import/export tariffs, tighter quotas or other actions that restrict trade volume.

Question 7

The Reciprocal Trade Agreements Act (RTAA) of 1934&#10;A) is an example of a trade liberalization policy.&#10;B) is an example of a trade protectionism policy.&#10;C) had very little impact on the tariff rates that the US imposed on imports in the 1930's.&#10;D) was designed to protect the jobs of US workers from cheap foreign imported products.&#10;E) both answers &#34;&#34;B&#34;&#34; and &#34;&#34;C&#34;&#34; are correct.

Accepted Answer

The RTAAreversed high US import tariff levels established under the Smoot-Hawley Tariff Act. The US repaired international trade relationships using RTAA. US Import tariff rates fell to an average of 13%, as compared to the 53% average-import-tariff levels of Smoot-Hawley. The RTAA is an example of a trade liberalization policy.

Question 8

The Smoot-Hawley Tariff Act of 1930&#10;A) increased US Tariff rates on all imported goods to an average of 53%.&#10;B) initiated an international trade-war coincided with the US 1930's Great Depression.&#10;C) was associated with a twenty-percent reduction in US agricultural exports, as compared to levels in the 1920's.&#10;D) motivated US trading partners to retaliate with their own high tariffs on US exports.&#10;E) All of the above.

Accepted Answer

The Smoot-Hawley Tariff Act increased US Tariffs on US Imports to an average of 53%. US trading partners retaliated with their own high tariffs on US exports. The resulting international trade-war coincided with the US 1930's Great Depression. Smoot-Hawley was associated with a twenty-percent reduction in US agricultural exports, as compared to levels in the 1920's.

Question 9

The years 1910-1914 of exceptionally high US agricultural exports, strong commodity prices and above-normal profits (adjusted for price inflation) triggered the belief that ________________ could be achieved again if the correct market conditions were restored.

A) Equilibrium market prices
B) Parity prices
C) Subsidized price supports
D) Inflation-indexed prices
E) None of these.

Accepted Answer

The unique market conditions of 1910-1914 associated with farm prosperity triggered the belief that farm prices and profits could or should return to those parity levels again.

Question 10

In the 20th-Century, the structure of US Agriculture trended towards&#10;A) a randomly-changing structure - the number and size of US farms varied so unpredictably , that it became difficult to forecast the trend of farm numbers and farm size in much of the 20th-Century.&#10;B) a very stable structure - the number of farms and the average size of farm (measured in acres and/or revenues) stayed fairly constant throughout the entire era.&#10;C) a less concentrated structure - the number of farms increased and the average size of farm (measured in acres and/or revenues) decreased.&#10;D) a cyclical structure - the number and size of US farms decreased in the first half of the century, but reversed the trend and increased in numbers and size in the last half of the 20th-Century.&#10;E) a more concentrated structure - the number of farms decreased and the average size of farm (measured in acres and/or revenues) increased.

Accepted Answer

Throughout most of the 20th-Century, the structure of US Agriculture became increasingly concentrated (smaller numbers and larger average size) Technology adoption and economies of scale are important factors associated with the concentrating trend.

Question 11

In the case of economies-of-scale, as a firm increases its percent usage of hired inputs,&#10;A) the resultant percent gain in productive output is less than the proportional increase in the hired inputs.&#10;B) the resultant percent gain in productive output is about the same as the proportional increase in the hired inputs.&#10;C) the resultant percent gain in productive output is greater than the proportional increase in the hired inputs.&#10;D) the resultant percent gain in productive output cannot be predicted with any degree of confidence.&#10;E) the law of diminishing returns determines the resultant percent gain in productive output.

Accepted Answer

The answer of In the case of economies-of-scale, as a...

Question 12

Increased on-farm TFP generally causes a(n) __________________ in the Average Total Cost of Production for the farm operation.&#10;A) increase&#10;B) negative externality&#10;C) positive externality&#10;D) decrease&#10;E) no change

Accepted Answer

The answer of Increased on-farm TFP generally causes a(n) __________________...

Question 13

Rational profit-oriented farm owners in the 20th-Century increased their use of productive technologies and capital investments while reducing their demand for human labor and animal inputs. These farm management choices were associate with the long-term rural labor exodus to urban centers.

Accepted Answer

The answer of Rational profit-oriented farm owners in the 20th-Century...

Question 14

Appoximately _____ % of all agricultural products are vertically coordinated through the value-chain via contracts.&#10;A) 95&#10;B) 15&#10;C) 50&#10;D) 76&#10;E) 36

Accepted Answer

The answer of Appoximately _____ % of all agricultural products...

Deck 2: Twenty-First-Century Trends, Opportunities, and Challenges for US Agriculture and Food Systems