Chapter 11, Government Intervention in Agriculture Video Solutions, Introduction to agricultural economics

Problem 1

Based on the following graph, please place a T or F in the blank appearing by each statement:
______________Consumers are better off economically if area $3+$ area 4 is grearer than area 2. Producers will be better off by the value of area 2 only.

______________This figure illustrates the effects of domestic demand enhancement.

______________Society as a whole will be better off by the value of area $3+$ area 4 .

Erika Bustos

Numerade Educator

03:52

Problem 2

Suppose the current market price for wheat is $$\$ 3$$ per bushel and that 10 billion bushels are currently being marketed both domestically and abroad. Given the following market shares and own-price elasticities of demand for domestic and export markets, answer the following questions.
$$
\begin{array}{lcc}
& \text { Market Share (\%) } & \text { Own-Price Elasticity } \\
\hline \text { Domestic } & 40 & -0.20 \\
\text { Foreign } & 60 & -2.00
\end{array}
$$
a. What would happen to U.S. wheat producers' total revenue if the quantity they supplied to the market increased by $3 \%$ (i.e., how much
would their total revenue change from current levels)?
b. Would domestic consumers of wheat products be better off or worse off economically than they were before this increase in supply? Why? Illustrate your answer graphically.

Akash M

Numerade Educator

Problem 3

The following graph depicts the market-level effects of using set-aside requirements to support farm prices and income. FIG CANT COPY
Enter a $\mathrm{T}$ or $\mathrm{F}$ in the following blanks to indicate whether the corresponding statements are true or false:
______________Domestic consumers are made worse off economically in the current period as a result of the government's actions.

______________The extent to which the government has to enter the market is unaffected by the elasticity of the demand curve.
______________$Q_{\mathrm{F}}$ represents the quantity sold to foreign governments.

______________Areas 3 and 4 represent the economic loss to society as a result of this policy action.

______________Producers gain area 6 from consumers' willingness to pay price $P_G$ for quantity $Q_{\mathrm{G}-}$

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00:40

Problem 4

Thomas Malthus observed some 200 years ago that
a. population grows faster at an arithmetic rate while food production grows at a geometric rate.
b. population grows at a geometric rate while food production grows at an arithmetic rate.
c. population grows at a decreasing rate while food production grows at an increasing rate.
d. none of the above.

Joanna Quigley

Numerade Educator

Problem 5

A record crop can lead to
a. sharp declines in input use and cash receipts from sale of production.
b. sharp declines in farm product prices and cash receipts from sale of production.
c. sharp declines in cash receipts from sale of production and higher input prices.
d. none of the above.

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Problem 6

The roots of the "farm problem" include_____________,_____________,_____________ and_____________
,

Rashmi Sinha

Numerade Educator

01:15

Problem 7

The more inelastic the market demand curve for a commodity, the more prices will

Tristan Wille

Numerade Educator

01:00

Problem 8

The 2013 Farm Bill will include the following "safery net":
a. Set-aside provisions for program commodities
b. Commodicy storage programs for excess feed grain production
c. Direct payments
d. None of the above

Breanna Ollech

Numerade Educator

01:04

Problem 9

The food and fiber industry includes which of the following:
a. Food and fiber consumers
b. Ethanol processing plants
c. Farmers and ranchers
d. All of the above

Joanna Quigley

Numerade Educator

02:28

Problem 10

Commodities covered by federal government programs include
a. pork.
b. hay.
c. rice.
d. none of the above.

Jennifer Stoner

Numerade Educator

01:00

Problem 11

The role of government payments to supporting net farm income levels
a. was relatively important in the early to mid-1980s.
b. was relatively unimportant in the early 2010 s.
c. varies directly with price-cost squeeze.
d. all of the above.

Breanna Ollech

Numerade Educator

01:15

Problem 12

The more inelastic the market demand curve for a commodicy is, the more prices will _______________ if supply increases.

Tristan Wille

Numerade Educator

Problem 13

Excess capacity refers to the situation where_______________ of a particular product is sufficient to meet demand.

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01:06

Problem 14

The U.S. food and fiber industry is one of the leastregulated industries in the U.S. economy. T F

Mike Gaerlan

Numerade Educator

01:54

Problem 15

There is more capital per unit of output than all other sectors of the U.S. economy combined. T F

Fathima Zahra

Numerade Educator

Problem 16

The rationale for the federal government's intervention in the U.S. food and fiber industry includes
a. protecting an infant industry.
b. keeping food prices low.
c. providing for food safery.
d. none of the above.

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Problem 17

Examples of federal programs that expand demand include
a. the National School Lunch Program.
b. the Farmer-Owned Reserve Program.
c. the Conservation Reserve Program.
d. none of the above.

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01:00

Problem 18

Examples of federal programs that pertain to crop insurance include
a. the Risk Management Agency.
b. indemnity payments.
c. CAT.
d. all of the above.

Breanna Ollech

Numerade Educator

01:00

Problem 19

Features of the 2014 Farm Bill include
a. the set-aside mechanism.
b. the acreage reduction program.
c. countercyclical payments mechanism.
d. none of the above.

Breanna Ollech

Numerade Educator