Deck 1: Responding to Market Outcomes: Competitionor Protection for American Agriculture

Question 1

One of the reasons that agricultural prices have tended to decline over time is because

A) government set prices below cost.
B) agricultural productivity has grown faster than demand for farm products.
C) foreign demand for American farm products has been excessive.
D) American farmers have been notoriously inefficient.

Answer 1

B

Question 2

Conservatives claim that

A) government intervention in agricultural markets has raised food prices.
B) government intervention reduces farmer incentives to be efficient.
C) price support programs tend to produce chronic agricultural surpluses.
D) All of the above.
E) None of the above.

Answer 2

D

Question 3

Which farm strategy is most likely to be supported by a Radical?

A) Farm Security and Rural Investment Act of 2002.
B) Subsidies granted by the Department of Agriculture's Commodity Credit Corporation.
C) A system that provided price subsidies only to small farmers.
D) None of the above.

Answer 3

D

Question 4

Which of the following statements are true?

A) The farm crisis of the 1980s was unprecedented in American economic history.
B) The average farm size (in acres) has been increasing since 1950.
C) Inflation-adjusted farm income has been increasing since the early 1970s.
D) The low interest rate policy of the 1980s forced farm prices and land values down.

Question 5

Which statement fairly reflects a Conservative view of the farm problem?

A) Farmers have so long relied on government to save them in times of distress that they became blind to market signals.
B) The cause of farm crisis is due to the decline of the family farm.
C) More low-cost loans and subsidies should be extended to needy farmers.
D) Agribusiness should be regulated by the Department of Agriculture.
E) None of the above.

Question 6

According to most Conservatives, government support programs for farmers results in

A) rising costs to consumers.
B) an inability to sell in world agricultural markets.
C) subsidizing inefficient producers.
D) All of the above.
E) None of the above.

Question 7

Which of the following statements is false?

A) Since 1950, farm population and the number of active farms have fallen, but average farm size (in acres) has risen.
B) The output of American farms is largely accounted for by small and medium-sized farms.
C) More than half of all American farms have total sales of less than $30,000.
D) Agricultural productivity rose during the twentieth century.

Question 8

The "target price" for wheat is

A) a market-determined price.
B) always equal to the world price.
C) a price determined by wheat futures traders.
D) the legally established minimum price.

Question 9

The rationale behind "parity pricing" is to

A) hold down retail food prices.
B) keep farm incomes from falling below a certain minimum level.
C) encourage farmers to find other occupations.
D) give special aid to the small farmer.

Question 10

According to Liberals, the basic problem faced by American agriculture is

A) that supply and demand analysis does not work in agriculture.
B) that parity prices have been too high.
C) that there are too many farmers.
D) that farm productivity and output growth typically exceed demand growth.

Question 11

The tendency in farm production is for

A) bigger farms with smaller levels of output.
B) smaller farms with greater levels of output.
C) greater government ownership and operation of farms.
D) the bigger farms to account for a greater percentage of agricultural production and income.

Question 12

The ideal Liberal farm program would

A) include short-term controls over agricultural prices and output.
B) nationalize the agricultural sector.
C) end "target pricing."
D) rely on the law of supply and demand to set agricultural prices.

Question 13

From a Radical perspective, the solution to the irrationality of agribusiness pricing and output decisions is

A) to encourage people to become farmers.
B) to provide more subsidies to agricultural wholesalers.
C) for social control over the agricultural sector.
D) to peg agricultural price and productivity changes.

Question 14

Radicals believe that government policies of the past half-century have helped small farmers compete with agribusiness.

Question 15

The Farm Security and Rural Investment Act of 2002 increased agricultural subsidies and price supports for small farmers.

Question 16

The decision by farmers in the 1970s to plant their crops "fencepost to fencepost" left them vulnerable to problems if worldwide demand for American agricultural products declined.

Question 17

After the Russian grain deals in the 1970s, farmers greatly increased their output, which had the effect of raising agricultural prices.

Question 18

The inflationary period of the 1970s raised farm costs while acting at the same time to reduce farmers' ability to sell in world markets.

Question 19

Farm debts eased in the mid-1980s as inflation reduced the value of their financial obligations.

Question 20

The strengthening of the American dollar in the early 1980s increased overseas sales of American agricultural products.

Question 21

Inflation-adjusted total farm income has been trending upward since the early 1970s.

Question 22

Conservatives want to end subsidies to small, inefficient farms while increasing subsidies and price supports to large, efficient farms.

Question 23

Concentration in the food products sector, according to Conservatives, has tended to produce farm prices that generate insufficient income for farmers.

Question 24

Radicals believe that our farm programs have been biased toward helping only large agricultural concerns.

Question 25

Liberals hold that the farm policies of the New Deal era heightened the flow of resources out of farming.

Question 26

For most of the twentieth century, the American agricultural sector was unable to meet consumer demand for food products.

Question 27

Radicals argue that the farm sector can only be sustained if large producers are allowed greater freedom to cooperate in setting prices.

Question 28

Conservatives maintain that government should completely withdraw from the farm sector.

Question 29

Most government aid to agriculture goes to small farmers who have less than $30,000 in sales.

Question 30

Radicals see the merging of biotechnology firms and agribusiness as beneficial to consumers.

Question 31

The Farm Security and Rural Investment Act of 2002 included provisions to help farmers improve soil, water, and wildlife resources.