General Knowledge 2

Question 1

Which of the following is a variable cost?

*taxes
*fuel
*insurance
*depreciation
*interest

Answer 1

fuel

Question 2

The money on deposit to ensure performance of a futures contract is called:

Answer 2

margin

Question 3

What is the length of time for the term on a machinery loan?

Answer 3

Can be negotiated with the lender

Question 4

What is managing price or market risk by taking an opposite position in the futures market from that held in the cash market?

Answer 4

Hedging

Question 5

What is loan amortization?

Answer 5

Paying off debt with a fixed repayment schedule

Question 6

If a producer decides to use the futures contract to hedge corn he plans to sell to sell at fall harvest, what would he do in the prior spring?

Answer 6

Sell futures contracts expecting to buy those contracts back when the corn is sold

Question 7

Show Me Farms needs to decide the most profitable weight to market a group of steers they are currently finishing. they estimate it will take an additional 650 lb. of feed/steer to increase the sales weight by 100 lb/steer. The current feed cost is 12.00/cwt. The expected sales price for the finished steers is $125.00/cwt. What is the Marginal Input Cost/head for this scenario?

Answer 7

78.00

Question 8

A contract that gives its owner the right but not the obligation to buy or sell a futures contract at a certain price for a certain period of time

Answer 8

Option

Question 9

On April 1, 2017, Kate borrowed $25,000 to plant corn. On November 1, 2017, she repaid the $25,000 along with $1239.58 interest. What annual interest rate did she pay?

Answer 9

8.50%

Question 10

The deadline for a crop insurance application for corn in Missouri is

Answer 10

March 15

Question 11

The financial ratio that would be best to evaluate a farms ability to cover unexpected operational expenses is

Answer 11

current ratio

Question 12

If the United States enters a trade agreement with country X and as a result country X charges a lower tariff for imported US pork, what happens to country X’s demand for U.S. pork?

Answer 12

It shifts out and to the right

Question 13

The change in total revenue due to a one-unit change in input is best defined as:

Answer 13

Marginal Revenue Product

Question 14

If Jack’s farm has a working capital value greater than $0, what do we know for certain about its current ratio

Answer 14

It is greater than one

Question 15

The tax on gasoline is considered a/an:

Answer 15

excise tax

Question 16

The degree to which a farm’s assets adequately secure its debts is referred to as:

Answer 16

solvency

Question 17

What is principal?

Answer 17

The actual amount of money borrowed from the lender

Question 18

Price that must be paid for options

Answer 18

Premium

Question 19

The current income tax structure is based on a ______ income tax rate schedule.

Answer 19

Progressive

Question 20

The change in total cost or total variable cost due to a one-unit change in input is best defined as:

Answer 20

marginal input cost

Question 21

How many square feet are in an acre?

Answer 21

43,560

Question 22

If John wants to know how much money he will have to live on when he retires, what process will he use to figure out his current investments value at retirement?

Answer 22

Compounding

Question 23

What is the difference between local cash price and price of the expiring futures contract?

Answer 23

Basis

Question 24

How many acres are in a section of ground?

Answer 24

640

Question 25

How many pounds of 34% protein supplement must be mixed with 9% protein corn to make a ton of 16% protein feed?

Answer 25

560 pounds

Question 26

Which of the following is unnecessary information to calculate the time value of money?

Answer 26

Stock market loss/gain

Question 27

Evans Farms delivered 48,620 lbs. of wheat to MidMO Farmers Elevator. How many bushels did they deliver?

Answer 27

810.3

Question 28

What is a legally binding agreement made on a future exchange to buy or sell a commodity?

Answer 28

Futures contract

Question 29

To protect against grain loss due to wind damage to a grain storage facility, a farmer would need:

Answer 29

Property insurance

Question 30

What is interest?

Answer 30

The cost of borrowing money

Question 31

A firm should shut down in the short-run if it cannot cover its

Answer 31

variable costs

Question 32

When does seed corn become a fixed cost?

Answer 32

When the farmer has planted it

Question 33

Your cow gets out onto a public road and is hit, causing injury to an automobile and its passenger. For protection, you need _______ insurance.

Answer 33

Liability

Question 34

How many acres would be in the parcel of ground with the legal description of NE1/4, SE1/4, S1, T3N, R3E of the 5th P.M.?

Answer 34

40

Question 35

The main drawback of an adjustable rate mortgage is:

Answer 35

The interest rate can increase

Question 36

At the beginning of last year, a farmer had an outstanding loan for $217,480. The interest rate was 6% APR. If the farmer made one loan payment at the end of the year of $35,000, what was the outstanding balance at the end of the year?

Answer 36

$195,528.80

Question 37

Sue is considering the purchase of a 132-acre farm. She figures the farm will generate a profit of $29,700 per year. She can get a fixed rate loan on the farm at 3.35% APR. Using the capitalization approach to value the property, Sue figures she could pay what per acre for the farm? (nearest dollar)

Answer 37

$6,716

Question 38

If pork and chicken are substitutes and the price of chicken rises, what happens to the demand of pork?

Answer 38

Demand for pork increases

Question 39

Which economic principle states that at some point in time marginal product decreases with each additional unit of input?

Answer 39

Diminishing Physical Returns

Question 40

Another term for net worth is:

Answer 40

Owner equity