Chapter 19 – Agriculture: Economics and Policy
87. A major criticism of the parity concept is that:
88. The fundamental cause of agricultural price and income instability in the United States has
been a(n):
89. Public choice theory would suggest that the lobbying of Congress by farm organizations
for legislation that would increase the appropriations from the U.S. government for
agricultural programs is an example of:
Chapter 19 – Agriculture: Economics and Policy
90. To get the U.S. Senate to pass a farm bill, a U.S. Senator from a farm state asks for the
support of a U.S. Senator from an urban state. The urban state Senator agrees to support the
bill, if in return the farm state Senator supports a bill for a mass transit project. This situation
is an example of:
91. Which of the following is not a reason to predict that farm subsidies might decline in the
future?
92. Many members of Congress who represent urban low-income areas vote in favor of farm
subsidies. In return, many representatives of agricultural areas support programs such as food
stamps, which provide benefits for the urban poor. This situation would be an example of:
Chapter 19 – Agriculture: Economics and Policy
93. Farm programs such as those maintained by the European Union (EU) and the United
States:
94. Overproduction of farm products in the European Community has been primarily the
result of:
95. A major feature of the “Freedom to Farm” Act of 1996 was the:
Chapter 19 – Agriculture: Economics and Policy
96. Through the Freedom to Farm Act of 1996, farmers were:
97. The Freedom to Farm Act of 1996 was designed to encourage farmers to:
98. The ambitious plan to wean American agriculture from subsidies, as embodied in the
Freedom to Farm Act of 1996:
Chapter 19 – Agriculture: Economics and Policy
99. The currently relevant Food, Conservation, and Energy Act of 2008:
100. The major factor contributing to lower prices for many farm products in 1998 and 1999
was:
101. The three types of farm subsidies under the Food, Conservation, and Energy Act of 2008
are:
Chapter 19 – Agriculture: Economics and Policy
102. Under the Food, Conservation, and Energy Act of 2008, if the target price for a bushel of
corn is $2.63 and the price of corn falls to $2.25, then a farmer will receive:
103. The major economic problem with recent farm policies is that they provide price and
income subsidies that:
104. Recent government policies to provide price and income subsidies in agriculture are
economically inefficient because they:
Chapter 19 – Agriculture: Economics and Policy
105. When a buyer or seller of an agricultural commodity takes action to protect against a
future change in the value of the commodity, then the buyer or seller is:
106. Which one of the following would be considered to be a risk management technique
used by farmers?
107. Which of the following is an effect of the domestic sugar program of the United States
on many of the less-developed countries that export sugar?
Chapter 19 – Agriculture: Economics and Policy
108. The effect of higher prices from the domestic sugar beet program in the United States is:
109. The price elasticity of demand for most agricultural products is relatively low.
110. The increasing relative importance of exports has increased the instability of the demand
for U.S. farm products.
Chapter 19 – Agriculture: Economics and Policy
111. An increase in the supply of farm products relative to the demand for them tends to cause
farm incomes to decline.
112. Technological advances have occurred throughout the history of agriculture, resulting in
higher productivity but lower incomes to farmers.
113. The percent of total employment in the U.S. that is accounted for by farms has been
declining in the last six decades or so, but the absolute number of farm employment has
actually risen slightly over those decades.
114. Price support programs for agricultural products tend to cause shortages of these
products.
Chapter 19 – Agriculture: Economics and Policy
115. The parity concept suggests that farmers should obtain a constant ratio of the prices they
receive for their farm products and the prices they pay for goods and services in general.
116. Public policy has been ineffective in alleviating the resource allocation problem in
American agriculture.
117. The price and income support programs for agriculture have given the most benefit to
those farmers with the most need for the government assistance.
118. Farmers, who are a small proportion of the population, can impose a large cost to
taxpayers in the form of agricultural subsidies because the cost imposed on each individual
taxpayer is small and not given much attention.
Chapter 19 – Agriculture: Economics and Policy
119. Agricultural price support programs result in consumers paying lower prices for the
product.
120. Domestic farm subsidies improve world trade and contribute to greater efficiency in the
international allocation of agricultural resources.
121. An example of the special interest effect is a farm program from which a large group
receives small benefits at the expense of a smaller group who individually suffer large losses.
122. The Freedom to Farm Act of 1996 aimed to eliminate agricultural price supports and
acreage allotments for many crops.
Chapter 19 – Agriculture: Economics and Policy
123. The movement to eliminate agricultural subsidies in the U.S. and make farmers rely
more on market forces, starting with the Farm Act of 1996, continues to this day.
124. The Food, Conservation, and Energy Act of 2008 provides farm subsidies in the form of
direct payments, countercyclical payments and marketing loans to farmers.
125. The fundamental problem in agriculture is not farming subsidies but land management.