Ag Econ Exam Two

Which of the following are legitimate ways of preventing externalities?

1) Social pressure - appealing to notions of mortality 2) Assign property rights to better such that there are no free-riders 3) Pigouvian taxes

How old is a steer when he is slaughtered and about how much does he weight?

18 months old and usually weights about 1300 pounds

If Y increases by 4 and X increases by 2, then what does the slope equal?

2

How long do steers spend in the stocker-cow stage?

4 months

How long does a steer spend in a feed lot?

6 moths

How long will a steer spend in the cow-calf stage?

8 months

The externality of dwindling elephant populations has been countered with some success by

Assaining private property better such as that there are not free-riders

To maximize profits, a farmer does not apply the amount of nitrogen that maximizes yield. Why?

Because if we apply that much nitrogen, the last few lbs of nitrogen costs more than the additional revenues they provide

A feedlot purchases cattle and then feeds them a diet high in grain for a number of months, and then sells the animal for slaughter. Which are examples of variable inputs / costs for the feedlot?

Corn for feed Antibiotics added to feed Sometimes labor

Describe stage three of production

Eventually, the amount harvested can decrease

The documentary The Corporation argues that corporations make profits largely by

Externalizing costs onto societies instead of paying the cost themselves

True or False? Both the number of manufacturing jobs and manufacturing output in the U.S. fell between 2000 and 2008.

False

True or False? Communist China may have had difficulties providing good food and housing, but it did a good job or protecting the environment.

False

True or False? Creative destruction can take place in response only to a new technology.

False

True or False? Creative destruction describes a process whereby for one job to be created two must be destroyed

False

True or False? Immigration is different from technology. Even though both lower the cost of producing a good, immigration causes some people to lose their job.

False

True or False? Margarine replaced much of butter consumption before the dairy industry had any time to respond.

False

True or False? Our economy has destroyed millions of jobs since 1925. As a result, unemployment today is much higher.

False

True or False? Representative Jesse Jackson Jr., in an online video, argued that companies like Apple must be allowed to innovate, even if it causes people in some sectors of the economy to lose their job.

False

True or False? Technology like tractors and tractor implements allows one person to produce much more food, and causes the size of the average farm to fall as less land is needed to produce the same amount of food.

False

True or False? The percent of farm jobs out of all jobs was 60% around 1800, compared with 2% today.

False

True or False? The percent of farm jobs out of all jobs was about 40% around 1900, compared with 5% today.

False

True or False? Trade is different from technology. Even though both lower the cost of producing a good, trade causes some people to lose their job.

False

True or False? When the government intervenes it will always improve the situation.

False

True/False? Farmers who raise wheat for grain cannot also allow cattle to graze on that wheat

False

True or False? For the first time, the Cuyahoga River was caught on fiver in 1969 due to water pollution.

False - it happened more than once

True or False? For years you have been purchasing chicken meat to eat. Now, however, China begins purchasing large amounts of chicken meat, driving the price of chicken so high that you can no longer afford it. Thus, China's purchasing behavior created an externality on you, in that you know longer can buy chicken at a low price.

False - must come out of the market to be an externality

What stage comes after the grass/hay stage?

Feed lot stage.

What are three major variable costs involved in wheat production

Fertilizer, pesticides and machinery expenses

The Native American Vine Deloria, with sarcastic humor, remarked on the responsibility of white people when she said Native Americans could never have thought of a(n) ...?

Flammable river

Someone who benefits from something at the expense of others, as the two girls in Bridesmaids did, is a ______.

Free-rider

The documentary Gasland, as discussed by The Colbert Report, showed video of water ______ catching on fire, and argued the water was polluted from fracking.

From kitchen sinks

A tangent line's purpose is to?

Give the slope at one point on a function

Slope tells us how ____ impacts _____

How X impacts Y

What does the slope of a tangent line tell you?

How Y changes in response to a tiny increase in X, starting at some value of X

If an externality exists and government crafts a policy to address the problem, the policy

It might improve the situation

Who coined the term "creative destruction"

Joseph Schumpeter

If farmers attempt to graze cattle on wheat and then harvest wheat grain, when must they remove cattle?

Late February or beginning of March, roughly or when the wheat develops its first hollow stem

The documentary, A River of Waste, claims that too much chicken manure in eastern Oklahoma was applied to cropland, and that excess manure polluted ______.

Nearby surface waters (lakes, rivers, streams, etc)

A slaughtering plant resides within a community of people. It sells meat to people outside the community, and emits a bad smell that nauseates nearby households. This bad odor is a ________ externality

Negative

In what order are nutrients listed on fertilizer bags?

Nitrogen, Phosphorous, and Potassium

In and enterprise budget, the term "fertilizer" largely refers to

Nitrogen, phosphorous and potassium

In 2008 the EPA considered countering the carbon-emission externality from cattle production through

Pigouvian taxes

The externality of water pollution in Sweden due to fertilizer use has been countered with some success by

Pigouvian taxes

How do you find the profit?

Revenue - total cost

What does slope equal?

Slope = rise/run

The externality of littering has been countered with some success by

Social pressure - appealing to notions of mortality

Sequoias are unusual among plants and animals in that their growth rate increases over time and is always in what stage of production?

Stage one

How do you calculate total cost?

TC= FC+VC

What was the most important discovery in man kind?

That nitrogen can be mad in a factory using fossil fuels and advanced chemistry. Elemental nitrogen from the atmosphere is converted to a solid or liquid form that plants can consume

Why do cattle emit much more carbon than other foods?

They are ruminants.

Externalities occur when a transaction between a buyer and seller impacts a ______ who was not part of the negotiation.

Third party

Al Gore helped establish corn ethanol subsidies to help the environment, and did so at the expense of his political future

True

True or False? A locust swarm, where locusts must keep moving to avoid being eaten by other locusts, is a metaphor for creative destruction, in that companies must continually innovate and evolve lest they be overtaken by new companies.

True

True or False? Because manufacturing output per worker in the U.S. has been rising between 1972 and 2010, the manufacturing sector is generally employing less people.

True

True or False? Creative destruction occurs when jobs are destroyed in one sector and created in another, in response to a new technology, immigration, trade, or the like.

True

True or False? In the episode, "They Took Our Jobs", the hit show South Park parodies the immigration debate by having people from the future travel to present times to work for lower pay.

True

True or False? Representative Jesse Jackson Jr., in an online video, suggested that no technological progress should take place if it caused anyone to lose their job.

True

True or False? The Luddites were a group of textile workers who responded violently to new machines taking their jobs.

True

True or False? The percent of farm jobs out of all jobs was 90% around 1800, compared with 2% today.

True

True or False? The percent of farm jobs out of all jobs was about 40% around 1900, compared with about 2% today.

True

True or False? The term "creative destruction" was coined by economist Joseph Schumpeter.

True

True or False? When jobs were lost in the carriage industry and created in the automobile industry, that is an example of creative destruction.

True

Vaccinating your children creates a positive externality by reducing spread of disease to others. Not vaccinating your child creates a negative externality by increasing spread of disease to others. For these reasons, any externality can be framed as positive or negative.

True

When do you want to produce?

When P > AVC

Describe state two of production

While plants and animals are still young they grow, but their rate of growth falls over time

If the slope of the tangent line is -1.5, then

X has a negative impact on Y

If the slope of the tangent line is zero, then

X has no impact on Y

What happens to Y when X increases by one?

Y also increases by one

Of all the animal-derived foods, what is the most humane?

beef

In Oklahoma, wheat is planted in the _____ and harvested in the _______

fall, summer

A farmer who applies however much nitrogen is needed to maximize yield is making the mistake of what?

not thinking about the cost of nitrogen

Like a farmer applying nitrogen, a factory should increase labor hours so long as

the value of the additional factory production is greater than the cost of the extra labor hours