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Economics: Principles, Problems, and Policies

Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn

Chapter 20

Agriculture: Economics and Policy - all with Video Answers

Educators


Chapter Questions

04:53

Problem 1

Suppose that the demand for olive oil is highly inelastic. Also suppose that the supply of olive oil is fixed for the year. If the demand for olive oil suddenly increases because of a shortage of corn oil, you would expect a ______ in the price of olive oil.
a. Large increase.
b. Small increase.
c. Large decrease.
d. Small decrease.
e. No change.

Heather Duong
Heather Duong
Numerade Educator
01:48

Problem 2

Use supply and demand curves to depict equilibrium price and output in a competitive market for some farm product. Then show how an above-equilibrium price floor (price support) would cause a surplus in this market. Demonstrate in your graph how government could reduce the surplus through a policy that $(a)$ changes supply or $(b)$ changes demand. Identify each of the following actual government policies as primarily affecting the supply of or the demand for a particular farm product: acreage allotments, the foodstamp program, the Food for Peace program, a government buyout of dairy herds, and export promotion.

Achintya Suden
Achintya Suden
Numerade Educator
03:46

Problem 3

Suppose that the government has been supporting the price of corn. Its free market price is $$ 2.50$ per bushel, but the government has been setting a support price of S3.50 per bushel. Which of the following are ways that the government might try to reduce the size of the corn surplus? Select one or more answers from the choices shown.
a. Decrease the support price.
b. Institute an acreage allotment program.
c. Decrease demand by taxing purchases of corn.
d. Raise the support price.

Doris Bennett
Doris Bennett
Numerade Educator
02:39

Problem 4

The majority of farm subsidies flow toward ______.
a. Poor, small-scale farmers.
b. Rich, large-scale farmers.
c. Government employees.
d. Grain wholesalers.

David Gagnon
David Gagnon
Numerade Educator
01:08

Problem 5

Which of the following are elements of current U.S. farm policy?
a. Farmers are free to choose how much to plant of any particular crop.
b. Direct payments.
c. Price supports.
d. Countercyclical payments.

Breanna Ollech
Breanna Ollech
Numerade Educator