NEW MEXICO FFA FARM BUSINESS MANAGEMENT CONTEST Part I

Which loan repayment schedule would cause you to pay the most interest?

• Semi-annual

• Monthly

• Bi-monthly

• Annual

Farmer Brown has wheat in her storage bins and decides that she does not want to absorb the risk that prices may decrease over the next few months. She could transfer that risk by:

• Buying a put

• Buying a call

• Selling a put

• Selling a call

Consumer demand for your production is determined by all of the following except:

• The price of the product.

• The price of substitute products.

• The price of exclusionary products.

• Quality of the product.

When a good or service is scarce, it means that:

• We can't economize in our purchase of that good.

• We have to forget about economics and buy everything that is available.

• The economic system has failed to operate properly.

• None of the above.

When governments restrict entry of new businesses into industry, the effect in that industry is to:

• Increase competition and reduce economic profit.

• Reduce competition and increase economic profit.

• Reduce both competition and economic profit.

• Increase both competition and economic profit.

The fact that the actual price paid for Fords is very close to the actual price of comparable models of Chevrolets is evidence that:

• The firms producing these cars are colluding to set price.

• The firms producing these cars have no control over price at all.

• Consumers regard these cars as close substitutes for one another.

• All of the above.

If there is a surplus of a product in a competitive market, we can infer that the market price:

• Is below the equilibrium price.

• Is controlled by a government-mandated price freeze.

• Is above the equilibrium price.

• Has been fixed by firms acting in collusion.

A security agreement reduces the risk of a loan for:

• A: A borrower.

• B: The salesman.

• C: The lender.

• D: Internal Revenue Service.

The time period which is short enough that the firm is able to vary the quantities of some (but not all) of its resources is called:

• The long run.

• The short run.

• A period of constant returns.

• None of the above.

Another term which has the same meaning as owner's equity is:

• Net worth.

• Net farm income.

• Total asset value.

• Total liabilities.