1. Farm Management 2009 Non-Math M/C Problems

2. 27. The own-price elasticity of demand estimates the impact on the quantity of a good demanded by a change in the price of the good. Normally, one would expect the own-price elasticity of demand to be A. positive. B. negative. C. zero. D. None of the above. negative.

3. 28. The income elasticity of demand estimates the impact of a change in income on the demand for a good. For normal goods, the income elasticity of demand is A. positive. B. negative. C. zero. D. None of the above. positive.

4. 37. A vicious cold spell in the late spring has wiped out the buds on the peach trees grown in Georgia, a major peach producing state. How will this freeze impact the price received for peaches by Maryland peach producers? A. No effect -- Georgia is too far away to have any impact on Maryland. B. Will lower the price because the demand for peaches will be lower. C. Because of the reduced supply, prices for peaches in Maryland will tend to move upward. D. No effect -- Maryland does not grow enough peaches to have any impact on prices. E. None of the above. Because of the reduced supply, prices for peaches in Maryland will tend to move upward.

5. 39. A written agreement by which an owner of property transfers title to someone for the benefit of beneficiaries is a A. trust. B. partnership. C. corporation. D. sole proprietorship. E. None of the above. trust.

6. 17. The demand curve shows the relationship between A. consumer tastes and the quantity demanded. B. price and the quantity demanded. C. price and production costs. D. money income and quantity demanded. E. None of the above. price and the quantity demanded.

7. 33. The capital gains taxes that would be due should a farmer sell his land is an example of a A. current liability. B. long-term liability. C. deductible expense. D. contingent liability. E. None of the above. contingent liability.

8. 11. Marginal revenue and marginal cost are useful concepts in determining the profit maximizing output level. Profit will be at its maximum level A. where marginal revenue is at its maximum level and marginal cost is 0. B. where marginal revenue is 0 and marginal cost is at its maximum. C. where marginal revenue equals marginal cost. D. where marginal revenue is at its minimum and marginal cost is at its maximum.. where marginal revenue equals marginal cost.

9. 12. If both demand and supply increased equally for an agricultural product, what will be the results on the quantity of the product sold and the price received? A. The same quantity will be sold at the same price. B. An increased quantity will be sold at a lower price. C. An increased quantity will be sold at a higher price. D. An increased quantity will be sold at the same price. E. None of the above. An increased quantity will be sold at the same price.

10. 20. Farmer Brown purchases a new tractor. A record keeping system which records both the addition to equipment and the reduction of cash is called A. income statement. B. dual effect. C. balance sheet. D. double entry. E. None of the above. double entry.

11. 22. Farmer Johnson has a rate of return on assets of 5% when assets are valued using the cost method, and a rate of return on assets of 7% when the assets are valued using market valuation. This means that the value of assets using the cost method A. is greater than the market valuation. B. is equal to the market valuation. C. is less than the market valuation. D. produces a higher return to farm assets. E. None of the above. is greater than the market valuation.

12. 26. Economists use elasticities to relate the percentage change in one variable to the percentage change in another variable. The cross-price elasticity of demand estimates the impact on the demand for a good with respect to the change in the price of another good. A positive cross- price elasticity indicates the two goods are A. substitutes. B. complements. C. inferior. D. luxuries. E. None of the above. substitutes.