Agricultural Economics

Question 1

study of how households and firms make decisions and how they interact in markets.

Answer 1

Microeconomics

Question 2

comes from Greek work oikonomos, means one who manages a households

Answer 2

Economy

Question 3

visual model of the economy that shows how dollars flow through markets among households and firms

Answer 3

Circular flow diagram

Question 4

refers to the value of the best forgone opportunity

Answer 4

Opportunity Cost

Question 5

this is reflected by the production possibilities frontier (PPF). It shows, for each output of one good, the max. amount of the other good that can be produced using all available resources. The frontier displays a trade off, more of one commodity imploes less of the other.

Answer 5

Production Possibilities

Question 6

claims that attempts ro describe the wold as it is

Answer 6

Positive statements

Question 7

claims that attempts to prescribe how the world should be

Answer 7

Normative statements

Question 8

ability to produce a good using fewer inputs than another producer

Answer 8

Absolute Advantage

Question 9

whenever must be given up to obtain some item

Answer 9

Opportunity cost

Question 10

ability to produce a good at a lower opportunity cost than another producer

Answer 10

Comparative Advantage

Question 11

amount of a good that buyers are willing and able to purchase

Answer 11

law quality demanded

Question 12

the claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises

Answer 12

law of demand

Question 13

a table that shoes the relationship between the pricd of a good and the quantity demanded

Answer 13

demand schedule

Question 14

graph of tje relationship between the price of a good and the quantity demanded

Answer 14

demand curve

Question 15

ang cjange that rises tje quality that buyers wish to purchase at any given price shifts tje demand curve to tje right, any change that lowers tje quantity that buyers wosh to purchase at any given price shiftd the demand curve to the left

Answer 15

Shift in the demand curve

Question 16

when a fall in the price of the one good reduces the demand for another good, the two goods.

Answer 16

substitute

Question 17

a good for which, other things beong equal, an increase in income leads to an increasd in demand

Answer 17

normal good

Question 18

a good foe which, other things being equal, an increase in income leads to a decrease in demand

Answer 18

Inferior good

Question 19

two good which an increase in the price of one leads to an increasd in the demand for the other

Answer 19

substitutes

Question 20

two goods for which an increase in the price of one leads to a decrease in the demand for tje other

Answer 20

complements

Question 21

Price increase causes to reduce the value of the consumers income

Answer 21

income effect

Question 22

the amount of a good that sellers are willing and able to sell

Answer 22

Quantity supplied

Question 23

the clain that other things being equal, the quantity supplied of a good risds when the price of the good rises

Answer 23

law of supply

Question 24

The advantage in tje production of a product enjoyed by one country over another when it produces the product at a lower cost

Answer 24

comparative Advantage

Question 25

branch of economics that deals the economy as a whole

Answer 25

macroeconomics

Question 26

Calculates the GDP by summing all expenditure on final goods and services

Answer 26

Expenditure Approach

Question 27

The market value of all final good and services that country's resource produce per unit of time regardless where the output is produced

Answer 27

GDP ( Gross Domestic Products)

Question 28

if net invome from abroad is positive the GNP is

Answer 28

greater than / more than GDP

Question 29

composed of saving plus consumption

Answer 29

disposal income

Question 30

a situation in which the market price has reached the levwl at which quantity supplied equals quantity supplied

Answer 30

Equilibrium

Question 31

prices balances quantity suppleand quantity demanded

Answer 31

Equilibrium price

Question 32

quantity supplied and the quantity demanded at tje equilibrium price

Answer 32

Equilibrium Quantity

Question 33

situation in which quantity suppied is greater than quantity demanded

Answer 33

Surplus

Question 34

situation in which quantity demanded is greater yhan quantity supplied

Answer 34

Shortage

Question 35

The prolonged and deep recession

Answer 35

depression

Question 36

Increase in the overall price level

Answer 36

inflation

Question 37

Period of continuous risng

Answer 37

sustained inflation

Question 38

protect producer

Answer 38

floor price

Question 39

protect the consumer

Answer 39

ceiling price

Question 40

A curve showing tje relationship of unemployment rate and inflation rate

Answer 40

Philips curve

Question 41

Price elasticity of demand is always negative because

Answer 41

demand changes with price

Question 42

cost of fee using others money

Answer 42

interest

Question 43

when elasticity of demand is zero

Answer 43

perfectly in elastic

Question 44

A type of interest where the interest in the preceding periods earn another interest in the succeeding periods

Answer 44

compounded interest

Question 45

The meaning of the word “economics” is most closely associated with the word

Answer 45

scarce

Question 46

As you add equal units of a variable input to a fixed input, the marginal or additional product diminishes even if total product may increase

Answer 46

law of diminishing returns

Question 47

The objective of a national consumer is to * Buy as much of each income allows of the cheapest articles Avoid purchasing the most expensive commodities Secure the highest level of satisfaction from his money income Spread his expenditures over as many products as possible

Question 48

A change in demand or supply * Is caused by a change in price Is presented by a movement from one point to another on the demand or supply curve Is caused by a change in any of the determinants of demand or supply other than price and is presented by a shift of the entire demand or supply curve None of the above

Question 49

Given a combination of increase in consumers’ income and a decrease in price factors of production the result will be * Such that the direction of changes in price and quantity will be uncertain Higher price , and a lower quantity level A lower equilibrium price and a higher equilibrium quantity A lower price and a higher quantity level

Question 50

he cost that firm incurs in purchasing or hiring any factor of production is referred to as ``` * explicit cost implicit cost variable cost fixed cost ```

Question 51

An increase in price will lead to a lower quantity demanded because: * Suppliers will supply only the smaller amount Some individuals purchase more of the good Individuals cut back their purchases of the good A and B

Question 52

One reason that the quantity demanded of a good tends to rise as its price falls is: * The decrease in price shifts the demand curve upward People feel a bit richer and increase their demand for the good Demand has to increase to restore equilibrium after a price fall At lower price suppliers are willing to supply more

Question 53

The quantity of coffee bought in the market is likely to increase when: * The price of tea increases The price of coffee increases Coffee is linked to cancer by new research The general income level of the population drops

Question 54

Studies revealed that margarine is an inferior good. Therefore, an increase income will result in: ``` * An increase in demand for margarine A shift to the left of the demand curve tor margarine A shortage of margarine An increase in the supply of margarine ```

Question 55

The production function is a technical law which: * Relates peso inputs to peso outputs Indicates the best way to combine factors to produce any given output Indicates the best output to produce Relates physical outputs to physical inputs

Question 56

iminishing returns is observed as a firm increases production by adding variable inputs to at least one fixed input because: * The ability or quality of the variable inputs hired decrease as more are hired The firm must lower the price of its product when it produces more units of output The per unit cost it must pay for variable input increases as more inputs are hired As more variable inputs are hired, the amount of fixed inputs per variable input they have to work with deceases

Question 57

``` A deflationary gap ran be eliminated by: * Decreasing investment Decreasing government spending Decreasing taxes Decreasing autonomous consumption ```

Question 58

``` The bulk of Philippine government expenditures is accounted for by: * Maintenance and other operating expenses Debt service Personal services Capital outlay ```

Question 59

By open market operations we mean the actions of the government to: * Increase or decrease government expenditures Increase or decrease taxes Buy and sell government bonds Buy and sell investment goods and services

Question 60

``` Which of the following is consistent with a tight monetary policy? * Low interest rates High reserve requirements An increase in money supply Subsidized interest rates to borrowers ```