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Ag Econ > Exam #4 (WS 10) > Flashcards

Exam #4 (WS 10) Flashcards

1
Q

An agriculture commodity producer is most likely a:

a. competitive firm
b. price taker
c. price maker
d. A and B only

A

a.

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2
Q

In a competitive industry, the demand facing an individual firm is:

a. perfectly elastic
b. inelastic
c. relativity elastic
d. perfectly inelastic

A

a.

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3
Q

A homogeneous product is:

a. milk
b. one in which consumers cannot determine the producer
c. one in which consumers buy due to advertising
d. one in which consumers cannot buy due to government labeling laws

A

b.

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4
Q

A competitive industry has the following characteristics except:

a. homogeneous product
b. perfect information
c. numerous firms
d. price maker

A

d.

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5
Q

Market power is a characteristic of:

a. competitive firms
b. monopoly
c. cattle ranchers
d. wheat farmers

A

b.

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6
Q

If the price of oil increases then:

a. the equilibrium price and quantity of food will increase
b. the equilibrium price of food will decrease, and the equilibrium quantity of food will increase
c. the equilibrium price and quantity of food will decrease
d. the equilibrium price of food will increase, and the equilibrium quantity of food will decrease

A

d.

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7
Q

Biotechnology will result in:

a. higher prices for Kansas producers
b. lower prices for agricultural goods
c. an increase in the price of soybeans
d. lower quantities of food producers

A

b.

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8
Q

competitive markets are:

a. cut-throat
b. illegal in some states
c. efficient
d. bad for consumers

A

c.

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9
Q

Monopolistic competition is a market structure of:

a. grapes
b. eggs
c. wine
d. wheat

A

c.

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10
Q

Numerous sellers means that:

a. the price is fixed, and does not change
b. the conditions of perfect competitions are not met
c. all firms are small relative to the market
d. all firms have market power

A

c.

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11
Q

Market power allows a firm to:

a. increase production
b. keep other firms out of the market
c. enhance the demand for a good
d. adjust the price of a good

A

d.

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12
Q

A firm with market power:

a. adjusts the price by forcing consumers to buy more of the good
b. adjusts the price by lobbying the goverment
c. adjusts the price by working the other firms
d. adjusts the price of a good by changing the quantity

A

d.

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13
Q

A competitive firm has all of the following characteristics except:

a. perfect information
b. freedom of entry and exit
c. homogeneous product
d. ability to set price of the product

A

d.

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14
Q

When economic profits are negative in the long run, firms will:

a. enter the industry
b. exit the industry
c. remain and try to do better
d. lower production costs

A

b.

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15
Q

A homogenous product is:

a. golf balls
b. golf courses
c. gold
d. Gold’s gym

A

c.

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16
Q

Oligopoly is characterized by:

a. many firms
b. numerous firms
c. few firms
d. at least 12 firms

A

c.

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17
Q

A good example of an oligopoly is:

a. wheat
b. grocery stores
c. electricity
d. cars

A

d.

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18
Q

A homogenous product is:

a. homogenized milk
b. one that the consumer cannot tell who the producer is
c. one that the producer cannot tell who the consumer is
d. none of the other answers

A

b.

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19
Q

A price taker’s best strategy is to:

a. take a high price
b. take a low price
c. lower production costs
d. advertise and market the product

A

c.

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20
Q

A successful advertising campaign must be for a:

a. competitive firm
b. price taker
c. price maker
d. firm facing an elastic demand

A

c.

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21
Q

A price taker has:

a. little market power
b. no market power
c. market power
d. any level of market power it chooses

A

b.

22
Q

A price maker has:

a. little market power
b. no market power
c. market power
d. any level of market power it chooses

A

c.

23
Q

Perfect information:

a. knowing everything (omniscience)
b. knowing prices and technology
c. knowing all of the industry secrets
d. knowing all of the information in the Wall Street Journal

A

b.

24
Q

Since it costs a great deal to purchase a farm:

a. agricultural has a barrier to entry
b. it is expensive, but this is not considered a legal or economic barrier to entry
c. you must take out a loan to do it
d. we do not see new people getting into farming

A

b.

25
Q

The demand facing a perfectly competitive firm is:

a. elastic
b. perfectly elastic
c. perfectly inelastic
d. inelastic

A

b.

26
Q

The market demand for a competitive industry is:

a. horizontal
b. upward sloping
c. downward sloping
d. vertical

A

c.

27
Q

The individual firm for a competitive industry is:

a. horizontal
b. upward sloping
c. downward sloping
d. vertical

A

a.

28
Q

The market demand for apricots is derived by:

a. vertical summation of marginal cost curves
b. horizontal summation of marginal cost curves
c. horizontal summation of individual firm demand curves
d. horizontal summation of individual consumer demand curves

A

d.

29
Q

The market supply for apricots is derived by:

a. vertical summation of marginal cost curves
b. horizontal summation of marginal cost curves
c. horizontal summation of individual firm demand curves
d. horizontal summation of individual consumer demand curves

A

b

30
Q

Over time, the demand for a good:

a. becomes more price inelastic
b. becomes more price elastic
c. becomes more income elastic
d. becomes more income inelastic

A

b.

31
Q

If a competitive firm changed a price higher than the market price:

a. it would earn more revenue
b. it would earn less revenues
c. it depends on the elasticity of demand
d. it would earn greater economic profits, but not accounting profits

A

b.

32
Q

If a competitive firm charged a price lower than the market price:

a. it would earn more revenues
b. it would earn less revenues
c. it depends on the elasticity of demand
d. it would earn greater economic profits, but not accounting profits

A

b.

33
Q

For a perfectly competitive firm:

a. P = AR
b. P = MR
c. both A and B
d. neither A nor B

A

c.

34
Q

The profit-maximizing conditions for a competitive firm are:

a. MR = MC and MC cut MR from above
b. MR = MC and MC cut MR from below
c. MR = AVC and MC cut MR from above
d. MR = AVC and MC cut MR from below

A

b.

35
Q

Efficiency results in:

a. consumers paying the cost of production
b. firms producing good at the lowest cost
c. zero economic profits
d. all of the above answers

A

d.

36
Q

Efficiency occurs in:

a. perfectly competitive industries
b. monopolistic competitive industries
c. all industries
d. oligopolies

A

a.

37
Q

Efficiency occurs through:

a. hiring the right people
b. free movement of resources into and out of industries
c. good investments
d. new technology

A

b.

38
Q

Society as a whole benefits from:

a. positive economic profits
b. negative economic profits
c. zero economic profits
d. negative economic profits and positive accounting profits

A

c.

39
Q

An increase in demand will result in:

a. higher economic profits, entry, zero economic profits
b. zero economic profits, entry, higher economic profits
c. entry, zero economic profits, higher economic profits
d. entry, higher economic profits, zero economic profits

A

a.

40
Q

A decrease in demand will result in:

a. more firms in the industry
b. less firms in the industry
c. equal number of firms, just less output
d. not enough information to answer

A

b.

41
Q

A competitive firm should always:

a. lower revenues
b. lower prices
c. lower technology
d. lower production costs

A

d.

42
Q

Competitive firms:

a. have the best advertising during the Super Bowl
b. have small, but effective marketing campaigns
c. could usually focus their resources on technology, not marketing
d. hire marketing teams

A

c.

43
Q

When a new technology is developed:

a. no one benefits
b. the more conservative firms that wait to adopt benefit
c. the early adopters receive the benefits
d. all competitive firms benefits

A

c.

44
Q

The biggest winner from technology is:

a. producers
b. consumers
c. government
d. media and press

A

b.

45
Q

Which industry meets all four characteristics of competition?

a. agribusiness firms
b. agricultural firms
c. all real-world industries
d. no real-world industries

A

d.

46
Q

A competitive firm:

a. must win customers over other firms
b. must grow demand for its product through marketing
c. must keep costs down
d. must try to steal information from competitors

A

c.

47
Q

A price maker:

a. is perfectly competitive
b. is perfectly monopolistic
c. must take price as fixed and given
d. none of the other answes

A

d.

48
Q

Competition:

a. is wasteful to society
b. is efficient for society
c. causes inequality among firms
d. causes inequality among consumers

A

b.

49
Q

Competitive industries:

a. require government intervention
b. compete all profits away until firms must exit
c. result in shut factories and unemployment
d. keep society growing by being efficient

A

d.

50
Q

Perfect competition has:

a. few sellers
b. many sellers
c. numerous sellers
d. one seller

A

c.

Ag Econ (10 decks)

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