Jones AGEC Final

An isoquant is: A. all combinations of two inputs that produce the same level of output B. all combinations of two outputs that can be produced with a fixed level of inputs C. all combinations of two goods that yield the same level of utility D. all combinations of two outputs that yield the same level of profits

A

At the equilibrium price: A. Qs = Qd B. Qs > Qd C. Qs < Qd D. Qs can be either > or < Qd

A

Capital intensive production agriculture is most likely to occur in: A. countries where capital is relatively inexpensive B. countries where capital is relative expensive C. countries where the price of everything is high D. countries where the price of everything is low

A

From the standpoint of the final solution (amount of input used and the resulting amount of output produced), setting MRP = MFC results in the same outcome as setting MR = MC. A. True B. False

A

If a law were passed that capped gasoline prices at a price well below current market levels: A. shortages would develop and rationing would be necessary B. all consumers would be better off C. oil producers would have an incentive to produce more gas D. there would be a surplus of gasoline

A

If market forces are allowed to work, shortages will: A. correct themselves with increasing prices B. correct themselves with decreasing prices C. remain because producers like them D. become illegal

A

If the price of Snickers bars increases by 2 percent, and the elasticity of supply of Snickers bars is equal to 3, then: A. quantity supplied increases 6 percent B. supply increases 6 percent C. quantity supplied increases 2/3 percent D. quantity supplied increases 3/2 percent

A

If the price of red roses increases: A. there is a movement along the demand curve for red roses B. there is a movement along the demand curve for carnations C. there is a shift in the demand curve for red roses D. there is a change in quantity demanded of carnations

A

Suppose that the price elasticity of demand is equal to -2. If the price decreases 2 percent, then the quantity demanded will: A. increase 4 percent B. decrease 4 percent C. increase 10 percent D. decrease 10 percent

A

Technology developed by Monsanto that increases crop yields results in: A. a shift in supply B. a change in quantity supplied C. no change in supply or quantity supplied D. both a change in supply and a change in quantity supplied

A

The law of diminishing marginal returns means that: A. additional incremental units of input result in less marginal output. B. MPP is always negative C. producing more than one unit of output will lower profits D. marginal utility is always negative

A

We would expect the demand for gasoline measured over a 5 year period to be more elastic than the demand for gasoline measured over a 3 month time period. A. True B. False

A

When a market is in equilibrium, there is no incentive for market participants to change behavior. A. True B. False

A

When very few substitutes are available - the own price elasticity of demand tends to be: A. Inelastic B. Elastic C. Unitary D. Irrelevant

A

Which is always true for standard costs curves? A. ATC>AVC B. MC>AVC C. MC>ATC D. ATC>MC

A

Which of the following causes a "change in demand" for oranges? A. a change in income B. an increase in the price of oranges C. a decrease in the price of oranges D. cannot be determined with the information given

A

A production possibility frontier is: A. all combinations of two inputs that produce the same level of output B. all combinations of two outputs that can be produced with a fixed level of inputs C. all combinations of two goods that yield the same level of utility D. all combinations of two outputs that yield the same level of profits

B

Every point along an indifference curve has a constant level of: A. Expenditure B. Utility C. MRS D. Price Ratio

B

Firms that operate in non-competitive industries that can exercise market power should always be allowed to do what is in their best interest because the benefits of "big business" always outweigh the costs. A. True B. False

B

For many years, the price of most ag commodities steadily fell in real terms because: A. technology improvements lagged demand growth B. technology improvements outpaced demand growth C. large companies took over the food supply chain D. farmers needed less to live on

B

If MC is 8 and the price of the output is 10 and ATC is 8 and MC is increasing as more output is being produced: A. The profit maximizing producer should shut down B. The profit maximizing producer should increase output C. The profit maximizing producer should decrease output D. not enough information given to know

B

If the price of bananas increases: A. There is an increase in the quantity demanded of bananas B. There is an decrease in the quantity demanded of bananas C. There is an increase in the demand for bananas D. There is an decrease in the demand for bananas

B

If the price of beef increases, then: A. the demand curve for chicken will shift left B. the demand curve for chicken will shift right C. there will be a movement along the demand curve for chicken D. the demand for beef will change

B

If the price of live cattle increases by two percent, and as a result the quantity supplied of live cattle increases by one percent, then the price elasticity of supply of live cattle is: A. elastic B. inelastic C. unitary elastic D. not enough information given to determine

B

In a command economy, resources are allocated by: A. a dictator B. whoever is in charge C. relative prices D. an elected group of officials

B

Rational economic behavior means: A. that individuals are assumed to be mentally stable B. that economic participants are purposeful and consistent in their behavior C. that all consumers would choose the same consumption bundle given the same information D. that marginal utility increases with increased consumption

B

The Law of Supply states that: A. producers will always maximize production B. the price of a good and quantity supplied have a positive relationship C. supply equals demand D. the Law of Diminishing Returns does not impact supply

B

The aggregate demand for most ag products is very inelastic, meaning: A. a small price incentive will lead to large consumption changes B. it takes a fairly large price incentive to stimulate much of a consumption change C. consumption and price are not related D. none of the above

B

The demand for air travel tickets purchased the day before a flight is: A. more elastic than the demand for tickets bought two weeks in advance B. less elastic than the demand for tickets bought two weeks in advance C. more elastic than train tickets D. not enough information to know

B

The individual firm supply curve gets its shape because: A. producers make decisions based on maximizing production B. producers make decisions based on marginal costs and marginal revenues C. producers minimize average costs D. producers supply more when prices fall

B

The market supply curve is: A. the MC curve above the minimum ATC B. the horizontal summation of all individual firm supply curves C. the vertical summation of all individual firm supply curves D. not enough information provided to answer

B

The opportunity cost of attending college includes: A. only the out of pocket costs B. all out of pocket costs and the wage that you could be earning if you chose to work instead C. only the cost of tuition, fees, and textbooks D. only the cost of tuition, fees, textbooks, room and board

B

When the price of wheat increases dramatically relative to the price of corn, profit maximizing grain farmers should plant the same amount of wheat as before. A. True B. False

B

An economist would advise cattle producers in Oklahoma to: A. maximize production B. maximize acres owned C. adopt cost reducing technology early D. maximize opportunity cost

C

An increase in the minimum wage will cause businesses to: A. increase labor usage B. produce more output C. substitute capital for labor D. none of the other answers

C

Artificially high price supports for a particular product (imposed by the government for example): A. makes consumers better off B. create shortages C. usually makes consumers and the general public worse off D. none of the above

C

A firm attempting to find the profit-maximizing combination of two inputs should: A. set the slope of the PPF equal to the slope of the isorevenue line B. set the slope of the PPF equal to the slope of the isocost line C. set the slope of the isoquant equal to the slope of the isorevenue line D. set the slope of the isoquant equal to the slope of the isocost line

D

Economic decisions are made based on: A. absolute prices B. both absolute and relative prices C. neither absolute nor relative prices D. relative prices

D

If market forces are allowed to work, surpluses will: A. remain because they benefit consumers B. remain because they benefit producers C. correct themselves by increasing prices D. correct themselves by falling prices

D

If the supply of corn is unitary elastic, and the price of corn increases one percent: A. the quantity supplied of corn will increase by more than one percent B. the quantity supplied of corn will increase by less than one percent C. the supply of corn will increase by more than one percent D. none of the other answers

D

Improvements in production technology: A. shift the MC curve down and to the right B. shift the supply curve down and to the right C. increases the quantity supplied D. A and B

D

In order to maximize profits, farmers should: A. maximize average production per unit of input B. minimize average total costs C. strive for the maximum production possible D. weight the benefits vs. the costs of input use decisions

D

Sustained growth in the Chinese economy over the next several years will benefit which of the following? A. Oklahoma beef producers B. Oklahoma grain growers C. neither A nor B D. both A and B

D

The "weight the benefits vs. costs" criteria applies to: A. deciding on the profit maximizing level of a single output to produce B. deciding on the profit maximizing combination of variable inputs to use C. deciding on the profit maximizing combination of outputs or products to produce D. all of the above

D

The individual firm supply curve is: A. the horizontal summation of the market supply curve B. the MC curve above the maximum ATC C. the MC curve above the minimum ATC D. the MC curve above the minimum AVC

D

A firm attempting to find the profit-maximizing combination of two outputs should: A. set the slope of the PPF equal to the slope of the isorevenue line B. set the slope of the PPF equal to the slope of the isocost line C. set the slope of the isoquant equal to the slope of the isorevenue line D. set the slope of the isoquant equal to the slope of the isocost line

A

All of the following could shift the demand for hamburger except: A. the price of hamburger B. the price of sirloin steak C. consumer incomes D. the price of bread

A

In a market economy, resources are allocated by: A. a dictator B. whoever is in charge C. relative prices D. an elected group of officials

C

Removing trade barriers and promoting more free trade between countries will: A. only improve standards of living in the relatively poorer countries B. only improve standards of living if a country has an absolute advantage in producing something C. improve standards of living in all countries involved D. only improve standards of living in the relatively wealthier country

C

The "invisible hand of free markets": A. will result in perpetual over supply (surplus) B. will result in perpetual under supply (shortages) C. will help markets gravitate toward equilibrium D. causes huge distortions in the economy

C

The severe freeze this spring in wheat producing regions will result in: A. a change in consumer preferences B. a change in quantity supplied of wheat C. a shift to the left in the supply of wheat D. no change in the market dynamics for wheat

C

Zero economic profit for an industry as a whole means that: A. The industry is comprised of poor managers B. The industry is non-competitive C. Resources in the industry are earning exactly what they are worth D. No individual firm in the industry is earning above zero economic profits

C

The law of diminishing marginal utility implies that: A. the last unit of a good consumed gives the most satisfaction B. marginal utility is always negative C. consumers can never be satisfied D. the first unit of a good consumed gives the most satisfaction

D

Under what circumstance will MC = MFC: A. MC always = MFC B. MC never = MFC C. When using one unit of variable input results in exactly one unit of output D. When the price of the input equals the price of the output

D