Midterm Specific Questions

Question 1

The output produced in bushels and the price of this output ($/bushel) for Robert Holden over the last three years are as follows:

Year Output Price Consumer Price Index
1998 7,000 $3.20 1.10
1999 7,500 $2.90 1.20
2000 8,000 $2.80 1.15

Assume that the only source of income for Robert Holden is from the production of this output. The best year in terms of real income for Robert Holden was

A) 1998.
B) 2000.
C) 1999.
D) Can’t tell; insufficient information.

Answer 1

A.) 1998

Question 2

Assume that for Jim Swain, a corn producer from Illinois, the only source of farm income is from the production of corn. Swain produced 150,000 bushels of corn in 2012, receiving $5 per bushel. Assuming this producer had production expenses of $300,000, and assuming the Consumer Price Index (CPI) for 2012 was 2.50, what was his real farm income for 2012?

A) $450,000
B) $200,000
C) $750,000
D) $180,000

Answer 2

D) $180,000

Question 3

The output produced in bushels and the prices of this output ($/bushel) over the last three years for Seth Johnson, a farmer in Amarillo, Texas, are as follows:

Year Output (bushels) Price ($/bushel)
2010 70,000 $3.20
2011 75,000 $2.90
2012 80,000 $3.50

Let the base year be 2011. Relative to 2011, output for 2010 was lower by ________ percent.

A) 6.67
B) 13.3
C) 7.14
D) 6.25

Answer 3

A) 6.67

Question 4

The output produced in bushels and the prices of this output ($/bushel) over the last three years for Seth Johnson, a farmer in Amarillo, Texas, are as follows:

Year Output (bushels) Price ($/bushel)
2010 70,000 $3.20
2011 75,000 $2.90
2012 80,000 $3.50

Let the base year be 2011. What is the price index for 2012?

A) 0.914
B) 1.094
C) 1.207
D) 0.829

Answer 4

C) 1.207

Question 5

The major component of all activities once a crop, livestock, or fiber product leaves the farm gate is

A) packaging and transportation.
B) labor.
C) advertising.
D) None of these

Answer 5

B) labor.

Question 6

The term “real” as opposed to “nominal” means that economists are making adjustments for

A) opportunity cost.
B) inflation.
C) resource scarcity.
D) None of these.

Answer 6

B) inflation.

Question 7

The value of any index for the reference or base year is always 1.
True
False

Answer 7

True

Question 8

U.S. farms tend to be diversified rather than specialized.
True
False

Answer 8

False

Question 9

One out of every six jobs in the U.S. economy is tied to the food and fiber sector.
True
False

Answer 9

True

Question 10

Equity equals liabilities minus assets.
True
False

Answer 10

False

Question 11

The output produced in bushels and the prices of this output ($/bushel) over the last three years for Seth Johnson, a farmer in Amarillo, Texas, are as follows:

Year Output (bushels) Price ($/bushel)
2010 70,000 $3.20
2011 75,000 $2.90
2012 80,000 $3.50

Let the base year be 2011. What is the output index for 2010?

A) 0.875
B) 0.933
C) 1.071
D) 0.937

Answer 11

B) 0.933

Question 12

The retail value of one dozen eggs is $2.89. Farmers receive $1.04 for this dozen of eggs. What is the farmer’s share of the retail dollar?

A) 45%
B) 64%
C) 36%
D) 56%

Answer 12

C) 36%

Question 13

The output produced in bushels and the prices of this output ($/bushel) over the last three years for Seth Johnson, a farmer in Amarillo, Texas, are as follows:

Year Output (bushels) Price ($/bushel)
2010 70,000 $3.20
2011 75,000 $2.90
2012 80,000 $3.50

Let the base year be 2011. Relative to 2011, the price of this commodity in 2012 was higher by ________ percent.

A) 20.69
B) 12.9
C) 9.38
D) 82.86

Answer 13

A) 20.69

Question 14

Suppose that Bill Toney, a tobacco farmer near Roanoke, Virginia has assets of $50 million and liabilities of $38 million. What is the equity for this tobacco farmer?

A) $50 million
B) $12 million
C) $88 million
D) $6 million

Answer 14

B) $12 million

Question 15

The food and fiber industry today accounts for roughly what percent of GDP in the United States?

A) 8 to 11 percent
B) 12 to 15 percent
C) 4 to 7 percent
D) 16 to 20 percent

Answer 15

B) 12 to 15 percent

Question 16

Data for Wilson’s Lamb Slaughtering Plant are given below:

Year Pounds of Lamb Slaughtered
1998 100,000
1999 75,000
2000 110,000

Let the base year be 1.0 in 1998. What is the output index for 1999?

A) 1.10
B) 75
C) 1.33
D) 0.75

Answer 16

D) 0.75

Question 17

Given the following information:

Value of real estate assets $10 million
Value of non-real estate assets $2 million
Financial assets $4 million
Liabilities $9 million

The equity for this operation is

A) $600,000.
B) $1 million.
C) $25 million.
D) $7 million.

Answer 17

D) $7 million.

Question 18

Suppose the index of prices received by farmers for 2012 was 1.70 and the base year of this index was 1996. Then

A) relative to 2012, prices received by farmers were 70% higher in 1996.
B) relative to 1996, prices received by farmers were 70% higher in 2012.
C) relative to 2012, prices received by farmers were 70% lower in 1996.
D) relative to 1996, prices received by farmers were 70% lower in 2012.

Answer 18

B) relative to 1996, prices received by farmers were 70% higher in 2012.

Question 19

Which of the following is (are) part of the agribusiness (food and fiber) sector?

A) Wholesalers, retailers, and food service purveyors
B) Farm input suppliers
C) Processors and manufacturers
D) All of these

Answer 19

D) All of these

Question 20

Suppose your nominal income in 1990 was $24,000. Suppose too that the consumer price index for 2012 was 1.5, and the base year for this index was 1990. How much nominal income would you need in 2012 in order to match the spending power of your $24,000 in 1990?

A) $48,000
B) $36,000
C) $24,000
D) $16,000

Answer 20

B) $36,000

Question 21

________: a branch of economics that focuses on the broad aggregates, such as the growth of gross domestic product, the money supply, the stability of prices, and the level of employment.

Answer 21

Answer: Macroeconomics

Question 22

Agricultural economics is an applied social science.
True
False

Answer 22

True

Question 23

The U.S. economy represents a mixture of capitalism and socialism.
True
False

Answer 23

True

Question 24

The U.S. economy represents a purely capitalistic system.
True
False

Answer 24

False

Question 25

RJR Nabisco has three alternatives for manufacturing snack foods: * Option 1: Manufacture cookies alone and obtain a profit of $30 million. * Option 2: Manufacture chips alone and obtain a profit of $25 million. * Option 3: Manufacture both cookies and chips and obtain a profit of $35 million. Given the information above, the opportunity cost of this firm is $30 million. True False

Answer 25

True

Question 26

________: branch of economics that focuses on the economic actions of individuals or specific groups of individuals.

Answer 26

Answer: Microeconomics

Question 27

________: a finite quantity of resources that is available to meet society's needs.

Answer 27

Scarce resources

Question 28

Alternative 1: Manufacture cat food alone and obtain a profit of $20 million. Alternative 2: Manufacture dog food alone and obtain a profit of $30 million. Alternative 3: Manufacture both dog food and cat food and obtain a profit of $45 million. The opportunity cost of the firm is: A) $20 million. B) $15 million. C) $45 million. D) $30 million.

Answer 28

D) $30 million.

Question 29

Economic reasoning that is true for one individual but not for society as a whole is referred to as A) Specialization. B) Fallacy of composition. C) Generalization. D) None of these.

Answer 29

B) Fallacy of composition.

Question 30

The U.S. economy represents what kind on econometric system? A) Capitalistic B) Communistic C) Mixed D) Socialistic

Answer 30

C) Mixed

Question 31

Scarce resources like land, labor, and capital can be categorized as A) Human resources. B) Natural and biological resources. C) Manufactured resources. D) All of these.

Answer 31

D) All of these.

Question 32

What branch of economics is concerned with effects of nutrition labeling on the dietary quality of consumers (i.e., what-if types of questions)? A) Microeconomics B) Positive economics C) Normative economics D) Macroeconomics

Answer 32

B) Positive economics

Question 33

An agribusiness firm may undertake three alternatives: buy cane sugar and manufacture various sugars and sweets, making a profit of $12 million; buy corn and produce ethanol, making a profit of $16 million; or buy wheat and produce breads, rolls, and pastries, making a profit of $13 million. The opportunity cost associated with these three choices is A) $3 million. B) $16 million. C) $13 million. D) $4 million.

Answer 33

C) $13 million.

Question 34

Congress commissioned a study to determine what the poverty level or minimum level for subsistence should be for the U.S. population. What branch of economics does this represent? A) Microeconomics B) Positive economics C) Macroeconomics D) Normative economics

Answer 34

D) Normative economics

Question 35

What branch of economics is concerned with interest rates and the gross domestic product (GDP) of the U.S. economy? A) Positive economics B) Microeconomics C) Normative economics D) Macroeconomics

Answer 35

D) Macroeconomics

Question 36

What branch of economics is concerned with the activities of U.S. agricultural producers? A) Macroeconomics B) Normative economics C) Positive economics D) Microeconomics

Answer 36

D) Microeconomics

Question 37

Most resources are best suited for a particular use. For example, climate and other conditions in Florida allow resources to be used in orange production in lieu of wheat or potato production. What economic concept deals with this issue? A) Specialization B) Opportunity cost C) Fallacy of composition D) None of these

Answer 37

A) Specialization

Question 38

________ refers to the implicit cost associated with the next best alternative in a set of choices available to decision-makers. A) Specialization B) Opportunity cost C) Resource scarcity D) None of these

Answer 38

B) Opportunity cost

Question 39

Recently, the price of gasoline dropped to just under $3.50/gallon. Economic analysts currently are focusing on questions concerning the likely impacts of this price decrease on the demand for gasoline. The branch of economics that deals with these questions is A) Microeconomics. B) Macroeconomics. C) Normative economics. D) Positive economics.

Answer 39

D) Positive economics.

Question 40

Suppose that the Beltrand family owns a farm near San Angelo, Texas. Three options exist for how to best use the farm: Option 1: Raise lambs and earn a profit of $425,000. Production expenses are $200,000. Option 2: Raise cattle and earn a profit of $475,000. Production expenses are $400,000. Option 3: Grow cotton and earn a profit of $600,000. Production expenses are $300,000. Which option should the Beltrand family undertake and what is the opportunity cost in this decision? A) Option 1, $600,000 B) Option 2, $425,000 C) Option 3, $475,000 D) None of these

Answer 40

C) Option 3, $475,000

Question 41

Which answer fits the following description: A change in price results in a relatively small change in quantity demanded Elastic Inelastic Unitary Elastic Own-Price Elasticity of Demand

Answer 41

Inelastic

Question 42

The own-price elasticity for cherries at the farm level is —0.60. Because of the recent freeze in Washington, cherry production will fall by 12 percent. Cherry prices are likely to A) Rise by 20%. B) Fall by 20%. C) Can't tell; insufficient information. D) Remain the same.

Answer 42

A) Rise by 20%.

Question 43

Which answer fits the following description: A change in price results in a relatively large change in quantity demanded Elastic Inelastic Unitary Elastic Own-Price Elasticity of Demand

Answer 43

Elastic

Question 44

If the own-price elasticity of demand equals -0.2, then the price flexibility of demand is equal to A) -0.2. B) -0.4. C) -5. D) None of these

Answer 44

C) -5.

Question 45

In a recent article in USA Today, the price of gasoline rose over the past year from $3.50 to $4.00, a price hike of about 14.29 percent. Gasoline consumption over the past year declined by 10 percent. So, on the basis of this article, we can conclude that A) The own-price elasticity for gasoline is roughly -1.43. B) Can't tell; insufficient information. C) The own-price elasticity for gasoline is -1. D) The own-price elasticity for gasoline is nearly -0.70

Answer 45

D) The own-price elasticity for gasoline is nearly -0.70

Question 46

Suppose that the own-price elasticity for Ragu spaghetti sauce is -1.25. Which of the following is (are) true? A) A 4% increase in price leads to a 5% decrease in quantity demanded. B) A 10% decrease in price leads to an 8% increase in quantity demanded. C) The demand for Ragu spaghetti sauce is unitary elastic. D) None of these.

Answer 46

A) A 4% increase in price leads to a 5% decrease in quantity demanded.

Question 47

The own-price elasticity of demand for shrimp between points A and B is A) -1.857. B) -0.538. C) -10. D) -1/10.

Answer 47

A) -1.857.

Question 48

Texas Roadhouse sells 3,000 medium cut steaks per month at $7.00 each. The own-price elasticity is estimated to be -1.30. If the price increases by 70 cents how many steaks will be sold? 3,390 2,610 3,600 2,400

Answer 48

2,610

Question 49

According to this diagram, the income elasticity of demand for salmon is A) Can't say; insufficient information. B) Greater than 0.5. C) Equal to 0.5. D) Less than 0.5.

Answer 49

C) Equal to 0.5.

Question 50

Which answer fits the following description: A change in price results in a equal change in quantity demanded Elastic Inelastic Unitary Elastic Own-Price Elasticity of Demand

Answer 50

Unitary Elastic

Question 51

The price of gasoline rose over the past year from $3.25 to $4.00 per gallon. Gasoline consumption over the past year declined by 10 percent. So we can conclude that A)The own-price elasticity for gasoline is -1. B) The own-price elasticity for gasoline is nearly -0.43 C) The own-price elasticity for gasoline is roughly -2.31. D) Can't tell; insufficient information.

Answer 51

The own-price elasticity for gasoline is nearly -0.43

Question 52

Which of the following is true? A) The law of diminishing marginal utility states that utility declines as more of a good is consumed. B) The law of demand states that as the price of a commodity rises, the changes in consumer surplus is negative. C) If the cross-price elasticity of demand between two goods is negative, then the two goods are complements. D) If the income elasticity of demand f is greater than 0, then the good is labeled as inferior.

Answer 52

C) If the cross-price elasticity of demand between two goods is negative, then the two goods are complements.

Question 53

We expect the sign of the cross-price elasticity between pancakes and maple syrup to be negative. True False

Answer 53

True

Question 54

Which of the following is true? Inelastic goods are price sensitive Elastic goods are price sensitive A perfectly Inelastic demand curve is horizontal The elasticity coefficient for gasoline is greater than 1.0

Answer 54

Elastic goods are price sensitive

Question 55

The Quantity Demanded for an unknown good is $15 for 30 units and $8 for 50 units. What is the % Quantity and % Price? Is this good Elastic or Inelastic? 25% Quantity, 90% Price, Inelastic 67% Price, 47% Quantity, Inelastic 90% Quantity, 25% Price, Elastic 47% Price, 67% Quantity, Elastic

Answer 55

47% Price, 67% Quantity, Elastic

Question 56

Suppose that a retailer sells 500 six-packs of Dr. Pepper per day at $3.50/six-pack. Also, suppose that the cross-price elasticity between Dr. Pepper and Pepsi is 0.6. If the retailer lowers the price of Pepsi from $4.00 to $3.60/six-pack, what is the percentage change in the price of Pepsi? A) 10% decrease B) 6% decrease C) 10% increase D) 6% increase

Answer 56

A) 10% decrease

Question 57

Assume that a retailer sells 800 six packs of Dr. Pepper per day at a price of $3.00/six-pack. You, as an economic analyst, estimate that the cross-price elasticity between Dr. Pepper and Coca-Cola is 0.6. If the retailer raises the price of Coca-Cola by 10%, how would the sales of Dr. Pepper be affected, ceteris paribus? A) Sales of Dr. Pepper would rise by 10% B) Sales of Dr. Pepper would fall by 48 six-packs C) Sales of Dr. Pepper would rise by 48 six-packs D) None of these

Answer 57

C) Sales of Dr. Pepper would rise by 48 six-packs

Question 58

An Elasticity Coefficient greater than 1.0 indicates an Inelastic good True False

Answer 58

False

Question 59

If the own-price elasticity of demand is -1.25, in order for the manufacturer of Ragu to increase total revenue, at least in the short run, it would be advisable to A) Raise the price of Ragu. B) Can't tell; insufficient information C) Lower the price of Ragu. D) Do nothing.

Answer 59

C) Lower the price of Ragu.

Question 60

Suppose that Cheddars is currently selling 500 Chicken and Oriental salads for $5. Suppose that the own-price elasticity for this product is -0.8. If Cheddars wishes to lower the price to $4, you predict that, all other factors held constant, the number of Chicken and Oriental salads sold at this price will be A) 580. B) 600. C) Can't tell; insufficient information. D) 420.

Answer 60

A) 580.

Question 61

The budget line does not depend on A) Income. B) The prices of the goods in question. C) The preferences for the respective goods. D) None of these.

Answer 61

C) The preferences for the respective goods.

Question 62

The mathematical representation of the satisfaction a consumer derives from a bundle of goods is called the A) Demand curve. B) Utility function. C) Engel curve. D) Indifference curve.

Answer 62

B) Utility function.

Question 63

According to the chart below, which bundle is least preferred, assuming total utility is the product of the quantity of popcorn and the quantity of sodas? Bundle Quantity of Popcorn Quantity of Sodas A 6 7 B 5 8 C 4 9 D 7 5 A) Bundle B B) Bundle D C) Bundle A D) Bundle C

Answer 63

B) Bundle D

Question 64

Indifference curves may intersect. True False

Answer 64

False

Question 65

According to the following chart, Bundle Bottles of Dr. Pepper Number of wings Total Utility A 3 4 24 B 2 6 24 C 4 5 40 D 5 3 30 when total utility is equal to 24, how many bottles of Dr. Pepper will this consumer give up in order to get on more wing? A) None B) Two C) Can't tell; insufficient information D) One-half

Answer 65

D) One-half

Question 66

The marginal utility of a good (e.g., bananas) declines with increases in the consumption of that good. This phenomenon is referred to as the A) Law of Diminishing Marginal Utility. B) Engel's Law. C) Law of Demand. D) None of these.

Answer 66

A) Law of Diminishing Marginal Utility.

Question 67

The marginal rate of substitution between points C and D is A) 3/5. B) -5/3. C) -3/5. D) 5/3.

Answer 67

B) -5/3.

Question 68

In order to construct the budget line, one only needs to know the prices of the goods in question. True False

Answer 68

False

Question 69

We do not need to actually measure the level of satisfaction derived by a consumer from the consumption of goods. We only need a ranking among the alternative consumption bundles. Thus utility is a(n) ________ concept. A) Cardinal B) Ordinal C) Mathematical D) None of these

Answer 69

B) Ordinal

Question 70

According to the chart below, which bundle is preferred? Bundle Bottles of Dr. Pepper Number of wings Total Utility A 3 4 24 B 2 6 24 C 4 5 40 D 5 3 30 A) Bundle C B) Bundle B C) Bundle A D) Bundle D

Answer 70

A) Bundle C

Question 71

Consider the following graph: The rightward parallel shift in the graph may be best explained as: A) The price of Coca-Cola rose. B) Total income available to the consumer fell. C) The price of Pepsi fell. D) Total income available to the consumer rose.

Answer 71

D) Total income available to the consumer rose.

Question 72

The marginal utility associated with drinking coffee is Total Utility Cups of Coffee 18 4 38 6 A) 10. B) Can't tell; insufficient information. C) 5. D) 2

Answer 72

A) 10.

Question 73

Which of the following statements is (are) true? A) The marginal rate of substitution is always negative. B) Indifference curves never intersect. C) When total utility reaches a maximum, marginal utility is zero. D) All of these.

Answer 73

D) All of these.

Question 74

Given the indifference curves in this graph, which combination of wings and hamburgers yields the highest level of satisfaction? A) 5 wings, 5 hamburgers B) 2 wings, 7 hamburgers C) 7 wings, 1 hamburger D) 7 wings, 4 hamburgers

Answer 74

A) 5 wings, 5 hamburgers

Question 75

For a representative consumer, 8 tacos and 2 hamburgers generate the same utility as 4 tacos and 4 hamburgers. How many tacos must the consumer give up in order to get one more hamburger? A) 2 B) 4 C) 6 D) None of these

Answer 75

A) 2

Question 76

Given the following diagram, the reason that the budget line rotated counterclockwise is due to the fact that the prices of Subway sandwiches fell. True False

Answer 76

False

Question 77

The clockwise rotation in this diagram may be best explained as A) Total consumer income allotted to beef and pork. B) The price of pork rose. C) The price of beef rose. D) The price of beef fell.

Answer 77

C) The price of beef rose.

Question 78

Given the following data: Quantity of Wings Total Utility Marginal Utility (MU) 3 60 -- 5 90 ? A) 15 utils B)20 utils C) 30 utils D) None of these

Answer 78

A) 15 utils

Question 79

If the expenditure allotted to buy Subway and Chick-Fil-A sandwiches equals $60, what is the price of a Chick-Fil-A sandwich? A) $2 B) $3 C) $4 D) $5

Answer 79

B) $3

Question 80

The shift in the budget line in the graph below is due to A) a rise in income. B) a fall in income. C) an increase in the price of hamburgers. D) an increase in the price of tacos.

Answer 80

B) a fall in income.

Question 81

Which of the graphs is consistent with the economic impacts of a food recall or food safety scare (e.g. salmonella in contaminated poultry or E. coli in contaminated beef)?

Answer 81

D.) D0 shifts left down to D1

Question 82

Consider the diagram below. Which of the following statement(s) is (are) true? A) The optimal purchase for this consumer is 8 glasses of Kool-Aid and 6 glasses of tea. B) The marginal rate of substitution is -3/4. C) MU Kool Aid/P tea = MU tea/PKool Aid D) All of these

Answer 82

B) The marginal rate of substitution is -3/4.

Question 83

According to the graph below, which of the following statement(s) is (are) true? (Note: D0 is the original relationship and D1 is the new relationship) A) New medical research indicated that eating macaroni and cheese leads to a degenerate nervous disorder. B) Assuming macaroni and cheese is an inferior good, income available to the consumer rose. C) There is a change in demand for macaroni and cheese. D) All of these

Answer 83

D) All of these

Question 84

Consider the diagram below. Which of the following statement(s) is (are) true? The American Medical Association reported that the consumption of green peas would lower the likelihood of breast cancer. Which of the following diagrams best illustrates the impact of this medical announcement? (Note: D0 is the original relationship and D1 is the new relationship.)

Answer 84

C.) D0 shifts up to the right to D1

Question 85

Consider the diagram below. Which of the following statement(s) is (are) true? According to the diagram, which of the following statements is (are) true? (Note: D0 is the original relationship and D1 is the new relationship. A) The price of bananas, a known substitute for apples, rose. B) Concerns are raised by consumers that ALAR, a carcinogenic (cancer-causing) chemical may have been sprayed on apples. C) New medical research indicates eating apples allows consumers to increase their lifespan. D) Both The price of bananas, a known substitute for apples, rose and New medical research indicates eating apples allows consumers to increase their lifespan

Answer 85

D) Both The price of bananas, a known substitute for apples, rose and New medical research indicates eating apples allows consumers to increase their lifespan

Question 86

Consider the diagram below. When market price is $5 per pound, the consumer surplus is A) $20. B) $125. C) $250. D) $40.

Answer 86

B) $125.

Question 87

When the market price increases to $8 per pound, which of the following statements is true? A) Consumers are better off by $20. B) Consumers are better off by $105. C) Consumers are worse off by $105. D) Consumers are worse off by $20.

Answer 87

C) Consumers are worse off by $105.

Question 88

The movement of point A to point B (or vice versa) represents A) the law of demand. B) a change in quantity demanded. C) a change in demand. D) None of these

Answer 88

B) a change in quantity demanded.

Question 89

Which of the following diagrams best illustrates the immediate impact of a food safety scare due to Salmonella infections of chicken? (Note: D0 is the original relationship and D1 is the new relationship.) A) B B) A C) C D) D

Answer 89

C) C line moves down

Question 90

Given the diagram below, what can you conclude? (just a diagonal line) A) The diagram pertains to an Engel curve for any inferior good. B) The diagram pertains to a budget line. C) The diagram pertains to a demand curve. D) Can't tell; insufficient information.

Answer 90

D) Can't tell; insufficient information.

Question 91

Suppose that Robin budgets $12/week for Wings 'N' Suds. The price of buffalo wings is $0.50 while the price of Coca-Cola is $1.50. What is the maximum number of buffalo wings that Robin may buy? A) 28 B) 12 C) 24 D) 4

Answer 91

C) 24

Question 92

Suppose that Robin budgets $12/week for Wings 'N' Suds. The price of buffalo wings is $0.50 while the price of Coca-Cola is $1.50. What is the maximum number of Coca-Cola drinks that Robin may buy? A) 8 B) 6 C) 12 D) 4

Answer 92

A) 8

Question 93

Suppose that Robin budgets $12/week for Wings 'N' Suds. The price of buffalo wings is $0.50 while the price of Coca-Cola is $1.50. Which of the following is (are) true? A) At point C, the consumer is said to be in equilibrium. B) At point C, the slope of the budget line and the MRS are not equal. C) The optimal combination of goods for Robin is 12 buffalo wings and 4 of Coca-Cola drinks. D) Both At point C, the consumer is said to be in equilibrium and The optimal combination of goods for Robin is 12 buffalo wings and 4 of Coca-Cola drinks E) All of these

Answer 93

D) Both At point C, the consumer is said to be in equilibrium and The optimal combination of goods for Robin is 12 buffalo wings and 4 of Coca-Cola drinks

Question 94

Recently, salmonella outbreaks occurred due to the contamination of the processing of peanuts. Given this information, it is likely that: A) The price of peanut products would fall and the quantity of peanut products produced would fall. B) The price of peanut products would rise and the quantity of peanut products produced would rise. C) The price of peanut products would rise and the quantity of peanut products produced would fall. D) The price of peanut products would fall and the quantity of peanut products produced would rise.

Answer 94

A) The price of peanut products would fall and the quantity of peanut products produced would fall.

Question 95

As a consumer's income rises, the proportion of income spent on food falls. This assertion is known as A) Law of Demand. B) Engel's Law. C) Law of Diminishing Marginal Utility. D) None of these

Answer 95

B) Engel's Law.

Question 96

Changes in taste and preference refer to changes in A) Composition of the population. B) Attitudes toward nutrition and health. C) Attitudes toward food safety. D) All of these.

Answer 96

D) All of these.

Question 97

Which of the following is the best example of an inferior good? A) Vintage French champagne B) Premium beer C) Vintage California wine D) Kool-Aid

Answer 97

D) Kool-Aid

Question 98

Suppose that a successful advertising and promotion campaign occurs for apples. Given this successful campaign, it is likely that: A) The quantity of apples sold will fall and the price of apples will rise. B) The quantity of apples sold will rise and the price of apples will rise. C) The quantity of apples sold will rise and the price of apples will fall. D) The quantity of apples sold will fall and the price of apples will fall.

Answer 98

B) The quantity of apples sold will rise and the price of apples will rise.

Question 99

Normal goods are goods for which consumption falls (rises) when income increases (decreases). True False

Answer 99

False

Question 100

The consumer is at equilibrium when the marginal rate of substitution is equal to the slope of the budget line. True False

Answer 100

True

Question 101

An example of average physical product in agriculture is the yield or number of bushels of corn produced per acre. True False

Answer 101

True

Question 102

What is the value of Z in the table below? Input Output TFC TVC TC MC 100 1,000 200 1,000 X – 150 1,100 W Z Y 5 A) 1,200 B) 1,500 C) 150 D) 1,700

Answer 102

B) 1,500

Question 103

The marginal value product for labor is equal to the marginal physical product for labor times the product price. True False

Answer 103

True

Question 104

The stage of production where the total physical product curve begins to decline corresponds to Incorrect Response A) Both MPP< 0 and Stage 3 B) MPP< 0. C) Stage 3. D) APP < 0.

Answer 104

C) Stage 3.

Question 105

The marginal physical product of labor is A) The amount of extra output that is produced when one worker is added and other factors of production are increased proportionally. B) The additional revenue received by the firm by selling the out of one additional worker. C) The output which labor could produce without other factors of production. D) The amount of extra output that is produced when one extra worker is added and other factors of production are held constant.

Answer 105

D) The amount of extra output that is produced when one extra worker is added and other factors of production are held constant.

Question 106

Given the graph below, the area beneath the MVP curve and above the marginal input cost (wage rate) curve represents the cumulative net benefit associated with the level of production. True False

Answer 106

False

Question 107

If the marginal revenue curve is tangent to the average variable cost curve, then the firm would do what? Maximize profit Breakeven Shut down Can't tell; insufficient information

Answer 107

Shut down

Question 108

What is the value of X in the table below? Input Output TFC TVC TC MC 100 1,000 200 1,000 X – 150 1,100 W Z Y 5 A) Cannot say; insufficient information B) 1,200 C) 1,000 D) 200

Answer 108

B) 1,200

Question 109

A profit-maximizing firm will use an input up to the point where the cost of the input equals the marginal revenue received by the firm. True False

Answer 109

False

Question 110

If a firms ATC is $10 per unit and the AVC is $4 per unit, then AFC is? $3 $4 $5 $6

Answer 110

$6

Question 111

Given the Graph Below: A) The firms' breakeven point is where the marginal cost curve and the average variable cost curve intersect B) The firms supply curve is the marginal cost curve above the average variable cost curve C) The firms supply curve is the marginal cost curve above the average total cost curve D) The firm maximizes profit where the marginal cost curve and the average total cost curve intersect

Answer 111

B) The firms supply curve is the marginal cost curve above the average variable cost curve

Question 112

Homogeneous products, No barriers to entry and exit, large number of sellers, and Perfect information are all examples of what? Imperfect competition Perfect Competition Oligopoly Production Agriculture

Answer 112

Perfect Competition

Question 113

What is the value of W in the table below? Input Output TFC TVC TC MC 100 1,000 200 1,000 X – 150 1,100 W Z Y 5 A) 100 B) 200 C) 1,000 D) None of these

Answer 113

B) 200

Question 114

Which of the following is true? A) AFC + AVC = ATC B) If total economic surplus is positive due to a shift in a demand or supply curve, society is better off C) The law of diminishing marginal returns states that as the use of an input increases, its MPP will eventually fall D) All of these

Answer 114

D) All of these

Question 115

A firm is breaking even if P=MR=ATC True False

Answer 115

True

Question 116

Average variable costs is equal to the firm's total variable costs divided by its total output. True False

Answer 116

True

Question 117

Assume that the price of sorghum grain is $6.00 per bushel. When we apply 30 tons of fertilizer on our 20 acres of sorghum grain, the total yield is 1,000 bushels. When we apply 50 tons of fertilizer, the total yield is 1,500 bushels. What is the marginal value product per ton of fertilizer? A) $25/ton B) $75/ton C) $150/ton D) None of these

Answer 117

C) $150/ton

Question 118

Marginal cost is the additional cost created by the next, or marginal unit of the variable input. True False

Answer 118

True

Question 119

Which of the following would provide the best evidence that a commodity is being produced under conditions of perfect competition? A) The production of the commodity is large. B) The demand curve facing any one producer is perfectly elastic. C) The profits of producers are low. D) The supply curve is perfectly inelastic.

Answer 119

D) The supply curve is perfectly inelastic.

Question 120

What is the value of Y in the table below? Input Output TFC TVC TC MC 100 1,000 200 1,000 X – 150 1,100 W Z Y 5 A) 1,700 B) 1,200 C) 1,500 D) 150

Answer 120

A) 1,700