1. For a small-country importer, which produces a quantity Q0 domestically under free trade, the most efficient way to support domestic producers is
a. a production quota, Q0
b. a production quota, Q0, combined with an import embargo
c. a production quota, Q0, combined with an import tariff
d. a production quota, Q0, combined with an output subsidy
2. An import tariff, t per unit, applied by a small-country importer, is equivalent to
a. an output subsidy of t per unit
b. an export subsidy of t per unit
c. an output subsidy of t per unit and a consumption subsidy of t per unit
d. an output subsidy of t per unit and a consumption tax of t per unit
e. none of the above
3. Marketing orders in California
a. were introduced in the 1930s
b. provide generic advertising and promotion
c. are instituted by producer referendum
d. provide mandatory programs for quality control
e. all of the above are true
4. The following activities of marketing orders might generate net social benefits
a. supply management programs
b. minimum size regulations
c. minimum sugar content regulations
d. all of the above
e. none of the above
5. The dynamics of supply response mean that, in response to the introduction of a target price above the market price
a. output will become progressively greater over time
b. the budgetary cost of deficiency payments will increase over time
c. the deadweight costs of the policy will progressively increase over time
d. all of the above
e. none of the above
6. Which of the following statements is not true?
a. U.S. sugar policy has lowered the world price but increased the U.S. domestic price
b. prior to 2004, the U.S. farm tobacco program benefited the U.S. economy
c. the U.S. dairy policy benefits producers at the expense of consumers
d. U.S. ethanol subsidies benefit corn growers at the expense of the nation
e. farm program subsidies caused U.S. production of corn, soybeans and wheat to increase by about 25 percent in 2006
7. Major contributors to the obesity epidemic in the United States include
a. the food stamp program
b. subsidies to corn producers
c. subsidies to dairy farmers
d. subsidies to sugar producers
e. all of the above
f. none of the above
8. The U.S. biofuels policy mandates a minimum percentage of ethanol in fuel. It therefore:
a. encourages U.S. production and use of corn for food and feed
b. encourages U.S. production and consumption of hogs
c. encourages U.S. production of corn and soybeans
d. encourages U.S. consumption of corn and hogs
e. all of the above
f. none of the above
9. Agricultural research funded by the government is profitable for society if
a. social benefits are greater than social costs
b. the benefit-cost ratio is greater than 1.0
c. the social rate of return is greater than the social rate of discount
d. all of the above
e. none of the above
10. Relative to the United States as a whole, over the years 1949-2002
a. California's agricultural productivity has grown faster (or not declined as fast)
b. California's agricultural production has grown faster (or not declined as fast)
c. California's agricultural input use has grown faster (or not declined as fast)
d. all of the above
e. none of the above