1. EQ # 12 – AGEC 105 – November 11, 2013 (5 points)
(1/2pt) 1. The price support program through a loan rate is controlled by which government agency?
2. Consider the diagram for wheat on the right.
(1/2pt) (a) With a loan rate of
$.52/pound, farmers will supply
_____________ million pounds.
(1/2pt) (b) How many bushels of cotton will the government accumulate at the loan rate of $.52/pound?
___________ million pounds P
$.52
$.45
125
140
180 Q S D
Million pounds
(1/2pt) (c) The government program will cost taxpayers $______ million.
(1/2pt) (d) Under this government program, how much will producers receive? $____million

2. (1/2pt) 3. Which of the following describe the real roots of the
farm problem? (List ALL that apply)
Own-price elasticity of demand for farm products is elastic
(b) Lack of market power by agricultural producers
Interest sensitivity of the agricultural sector
Fixity of farm assets
(e) Underproduction of farm products
(1/2pt) 4. Which program established in 1985 was designed to reduce acreage in production, reduce erosion, and improve water quality? (1/2pt) 5. Which Farm Bill was termed the “Freedom to Farm” Act? (1pt) 6. The target price for this commodity is $4.17/bushel and the loan rate is $2.94 bushel. What is the commodity? If the market price is $4/bushel, what is the deficiency payment per bushel?

3. Random Question
Which two countries are the largest producers of coffee?