1. EQ #1 – AGEC 105 Capps AGEC 105 Spring 2010 Worth 5 points.
An agribusiness firm may undertake three alternatives:
(a) buy cane sugar and manufacture various sugars and sweets, making a profit of $12 million.
(b) buy corn and produce ethanol making a profit of $11 million
(c) buy wheat and produce breads, rolls, and pastries, making a profit of $14 million.
The opportunity cost associated with these three choices is $__12____million.
2. Congress wishes to tax consumers who buy sugar-sweetened beverages in order to help alleviate the obesity problem in the United States.
Is this issue a microeconomic or a macroeconomic issue?
3. What branch of economics is concerned with the effects of food safety (e.g. salmonella) on consumer demand for poultry? (i.e. what-if types of questions)
positive
4. Suppose the index of prices received by farmers for 2009 was 0.92 and the base year of this index was 1996.
(a) What is the value of the index for 1996? ____1______
(b) Relative to 1996, farm prices were ___8___% lower in 2009.