Commodity Markets Flashcards
(22 cards)
A Standardized contract traded on the futures exchange to buy or sell a specified quantity of a commodity at a specified price in the future is called a
Futures Contract
What is Physiocracy
Agriculture
Who is the “Father” of Physiocracy?
Quesnay
The Morrill Act
Land grant act
The Hatch Act
Gives farmers access to university research
Smith-Lever Act
Extended School Hours for farm kids
Verbal description for demand elasticity for food in the US.
Relatively Inelastic
in the US, is food considered a luxury or necessity?
Necessity
Verbal description for demand elasticity for food almost everywhere else.
Relatively elastic
Outside the US, is food considered a luxury or necessity?
Luxury
What is public law 480?
If you are non-Marxist country, we send you the surplus of food
How do public law 480 recipients pay for the grain they receive?
Counterpart funds
How does public law 480 impact the supply and demand equilibrium for agriculture?
Quantity demand shifts right
Name and Define the two crop LIMITATION programs:
Soil Banking- Government pays farmers to not farm, conserve land- Not to Plant
Payment in Kind (PIK) Government pays farmers to not put crop on the market- Not to Pick
large storage costs is a drawback of which crop limitation program?
Payment in kind
How does soil banking and payment in kind of programs impact supply and demand equilibrium for agriculture?
Supply shifts left
name and define two major price SUPPORT programs:
Government purchase and price differential
which major price support program would a farmer prefer and why?
Government purchase because price differential would be in his mind, a government handout.
Which major price support program would the consumer prefer?
Price differential
what is the term for a payment for which there is no return good or service?
Unilateral transfer payment
A unilateral transfer payment to a household is called:
Welfare
A unilateral transfer payment to a business is called:
Subsidy
