6. In the past, government policies have: a. improved the incomes of \"small\" f
ID: 1127559 • Letter: 6
Question
6. In the past, government policies have: a. improved the incomes of "small" farmers relative to "big" farmers b. stabilized US farm exports c. discouraged the production of Gasohol d. tended to focus on the symptom of the farm problem 7. For most farmers in the short run: a. the average cost curve is identical to the average variable cost curve b. the average cost curve does not change with changes in output c. the vertical distance between the AC curve and the AVC is very small d. the vertical distance between the AC curve and the AVC is relatively wide 8. Which one of the following is not favorable for increasing exports in US farm output? a. value of US dollar depreciates b. value of US dollar appreciates c. bad weather reduces crop and livestock production in other countries d. President Obama develops close relations with leaders in Europe, Japan, China and Mexico 9. Agriculture price supports have been a key component for many farm commodities for years. Which of the following does not fit a price support program? a. price supports support the theory of "free markets b. to be effective, a price support would be a minimum price above the market equilibrium price c. price supports generally result in surpluses d. generally, price supports give rise to increases in farm income 10. Which one of the following is not considered a part of the US Agribusiness industry? a. Ohio corn farmer b. Honda c. Philip Morris d. John Deere 11. To eliminate a farm commodity surplus at the price support level, the federal government could make the commodity aggregate supply curves: a. perfectly elastic b. perfectly inelastic c. shift to the right d. shift to the left 12. Assume the price of corn is $4 per bushel; price elasticity of corn is 0.10; and the price of corn falls by 25% to S3 per bushel. Thus, the quantity demanded of corn would increase by: a. 2.5% b. 25% c. 10% d. can't be determinedExplanation / Answer
6. In the past, government policies have tended to focus on the symptom of the farm production. The government has initiated many policies and subsidies for farmers, and for equipments used for form production at subsidised rate. This has helped in raising the production of farm. So, correct option is d.
7. For most farmers in the short run, the vertical distance between the AC curve and the AVC is relatively wide. This is because in every season, the varaible cost of the farmer will keep on changing based on the cropping patterns used.
8. When the value of the US appreciates is not is not favourable for increasing export in the US farm output. This is because appreciation will lessen the revenues of the expoters by making their currency costlier in respect of others. Correct option is b.
9. The price supports support the theory of free markets does not fit for a price support program. This is because it will provide the added incentive to the farmers in comparision to others. So the correct option is a.
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