Ag Business

Succession planning refers to:

• planning to raise a new variety of soybeans that have not been tried before
• planning for next year's success of the business
• planning to move the business to the younger generation
• planning to increase the size of the farm business

A drought in South America will

• increase the chance for rain in the United States
• decrease the amount of snow that falls in the Rocky Mountains
• increase demand for U.S. grain
• decrease the price of U.S. grain

Farm Financial Standards Council promotes uniformity of farm financial records for the purpose of:

• analyzing farm production characteristics
• fair comparisons between all farms
• fair comparisons between farms in foreign countries
• analyzing competitive advantages

Which one of the following can influence the value of crop land?

• interest rate of the mortgage
• national gross farm income
• a mortgage on the land
• what it produced last year

Four sections of land are how many square miles?

• 1 square mile
• 2 square miles
• 3 square miles
• 4 square miles

Assume that the cross-price elasticity of pork for chicken is 1.2. This cross-price elasticity indicates that:

• pork and chicken are complementary goods
• there is no relationship between the demand for pork and the price of chicken
• a 1.2 percent increase in the price of chicken will lead to a 1 percent increase in the price of pork
• a 10 percent increase in the price of check should lead to a 12 percent increase in the demand for pork

In a perfectly competitive market, which one of the following is most correct?

• Sellers cannot differentiate their products by advertising.
• A firm's demand curve is perfectly inelastic.
• There are many sellers but very few buyers. This means sellers have market power.
• Sellers can increase their profits by charging a higher price for their goods.

In the long run, a farm business manager should try to cover:

• fixed costs
• total costs
• all costs
• variable costs

The government has set a price floor for milk at $14/cwt (cwt = 100 pounds), but market conditions indicate that the market equilibrium is $11/cwt. What effect will the price floor have?

• stimulate establishment of new dairies
• cause a shortage of milk in the market
• no effect on the supply of milk
• cause a surplus of milk in the market

When the U.S. dollar is considered to be weak, the demand for agricultural imports:

• none are correct
• have no change
• increase
• decrease