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Prin of Agr Econ
| Question | Answer |
|---|---|
| An applied social science that deals with how producers, consumers, and societies use scarce resources in the production, processing, marketing, and consumption of food and fiber products. | Agricultural economics |
| A free market system in which individuals own resources and have the right to employ their time and resources however they choose, with minimal legal constraints from government. | Capitalistic |
| A social science that studies how consumers, producers, and societies choose among the alternatives uses of scarce resources in the process of producing, exchanging, and consuming goods and services. | Economics |
| An economics system consisting of business entities that are involved in one way or another with the supply of food and fiber products to consumers. | Food and fiber system |
| Branch of economics that focuses on the broad aggregates such as the growth of gross domestic product, the money supply, the stability of prices, and the level of employment. | Macroeconomics |
| Branch of economics that focuses on the economic actions of individuals or specific groups of individuals. | Microeconomic |
| An economic system in which markets are not entirely free to determine prices in some markets but are in others. Government controls in selected markets and welfare programs are indicative of a mixed economic system. | Mixed economic system |
| A branch of economics that focuses on determining what should be issues and questions. It assigns specific values with specific goals or objectives. | Normative economics |
| The cost of producing a good as measured by the amount of a second good that must be forgone to release just enough resources to produce one additional unit of the first good. | Opportunity cost |
| A branch of economics that focuses on what is and what would happen if questions and issues; does not involve value judgments or policy prescriptions to reach a particular objective. | Positive economics |
| The separation of productive activities between persons or geographical areas in such a manner that none of these person or regions is completely self-sufficient. | Specialization |
| Economic reasoning that is true for one individual but not for society as a whole is referred to as: | Fallacy of composition. |
| Why do medical doctors receive higher earned incomes than college professors? | There is a greater relative scarcity of medical doctors. |
| Economic decisions: | involve choosing between alternative. |
| The fact that a consumer buys one good instead of another would imply that person derives more satisfaction per dollar spent from the good chosen than could have been derived from the other good not chosen. | True |
| Macroeconomic performance has little effect on your everyday life. | False |
| Refers to the number and market power of firms marketing their products in a particular market. A market characterized by a small number of firms accounting for the majority of total sales is said to have a high degree of concentration. | Specialization |
| Also commonly referred to as net worth, represents the owner's share of the business. This value is found by subtracting total liabilities from total assets. | Equity |
| Raises raw farm products and supplies them primarily to manufacturers and processors. | Farm sector |
| Referred to as the nation's output, this is equal to consumer expenditures, business investment, government spending, and net exports (exports minus imports). | Gross domestic product |
| Annual level of income received from farming activities before farm expenses, taxes, and withdrawals have been deducted. | Gross farm income |
| The combination of two or more firms into one. | Mergers |
| An index that shows the level of current price of a particular commodity or group of commodities relative to a particular year, or base period. | Price index |
| Returns on capital invested in farm assets represent a measure of profitability. Profitability may be expressed in dollar terms (e.g., net farm income) or in percentage terms (e.g., rate of return on farm capital). | Productivity |
| Refer to economic measures for which adjustments to inflation have been made. | Nominal (current) dollar values |
| The percent of disposable income currently spent on food in the United States is about | 20% |
| The value of food expenditure contributed by firms beyond the farm gate. | Marketing margin |
| The food and fiber industry accounts for roughly what percent of GDP in the United States? | 12-15% |
| Currently, the food and fiber sector accounts for about 12 to 15% of gross domestic product (GDP). | True |
| Today, the number of farms in the United States is roughly in the order of ________ . | 500,0000 |
| The nation’s food and fiver industry consists of business entities that are involve in one way or another with the supply of food and fiber products to consumers. | True |
| Consists of business entities that are involved in one way or another with the supply of food and fiber products to consumers. | Food and fiber industry |
| Defined by the income available for consumption and the prices that a consumer faces. This constraint defines the feasible set of consumption choices facing a consumer. | Budget constraint |
| The total satisfaction derived from consuming a given bundle of goods and services. | Total utility |
| If asked to choose between combination A or B on one of your indifference curves between milk and cookies, you would say: | I don’t care; both would be equally good. |
| Suppose, under your present consumption pattern, your ratio of marginal utility to price is equal for all goods except widgets, whose ratio is higher. To maximize utility you should consider: | purchasing more widgets. |
| If a good were free (that is, if its price were zero), you would consume: | the good until the marginal utility of consuming it reached zero. |
| If the price of hamburgers increase while the price of milk and your budget remained constant, then your budget line for milk and hamburgers would. | pivot about the milk intercept toward the hamburger axis. |
| Consumers maximize their utility by finding the point on their budget line that enables them to reach the highest possible indifference curve. | True |
| Shows all the different combinations of goods that yield a constant amount of satisfaction for the consumer. | Indifference curve |
| Shows all the combinations of goods that a given amount of money can buy for the consumer. | Budget line |
| At all points along a budget line, the consumer is: | spending the same amount of money. |
| The law of Diminishing Marginal Utility refers to the fact that marginal utility declines as more and more of a good is consumed. | True |
| The law of diminishing marginal utility suggest that as we consume more of a good, the additional satisfaction received from consuming each additional unit of that good falls. | True |
| In order for a normal consumer to consume another unit of a particular good, marginal utility must be: | equal to or greater than zero. |
| At any point below a person’s budget constraint, that person is spending the same amount of money as he would be if he were consuming some bundle of goods on the budget constraint. | False |
| A consumer’s “indifference” curve shows: | All combinations of two products that yield the same total satisfaction to the consumer. |
| A consumer’s “budget line” shows: | All combinations of the two products the consumer can purchase given their budget. |
| The purpose of the indifference curve analysis is: | To explain how much of two goods a consumer should purchase with their available income if they want to maximize satisfaction. |
| Demand curves: | show how quantity purchased changes as its price changes, ceterus paribus. |
| A schedule that shows how many units of a good the consumer will purchase at different prices for that good during some specified time in a specified market, all other factors constant. | Engel curve |
| This curve, along with the supply curve, determines the equilibrium price for a given commodity or service. This captures the individual demand schedules of consumers participating in this particular market. | Market demand curve |
| Refers to movement of a demand curve to the right (left) from its initial position as incomes or other factors increase (decrease) demand for a good or service. | Change in demand |
| Substitution of a product for another because the price of the former has declined or increased. | Substitution effect |
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