2018 State FBM

Which financial statement reports farm revenues minus farm operating and financial expenses over an accounting period?

• Balance sheet

• Statement of owner equity

• Statement of cash flows

• Income statement

The original cost basis of an asset plus the cost of any improvements or alterations that extends the life of the asset less accumulated depreciation or depletion on the asset is referred to as the:

• Adjusted basis or cost value of the asset

• Net market value of the asset

• Total amortization value of the asset

• The cost of the asset

A management tool where a person compares two different production options or practices, and then compares estimated income and expenses to identify the better option or practice is a/an:

• Cash flow projection

• Enterprise budget

• Partial budget

• Whole farm budget

A statement of projected costs and returns associated with one’s production process, usually for one production period, is called the:

• Income statement

• Enterprise budget

• Partial budget

• Profit and Loss statement

When a farmer increases his investment in land, buildings, and equipment without increasing the total units of production, his cost per unit:

• Remains the same

• Decreases

• Increases

• Varies from farmer to farmer

Which of the following is an opportunity cost of farming your own land?

• Equipment cost

• Potential rent

• Input cost

• Labor cost

The law of demand states that, holding other things constant:

• As price rises, demand will rise

• As price falls, quantity demanded declines

• As price rises, supply will fall

• As price falls, quantity demanded rises

The profit maximizing quantity of output is where:

• Demand equals supply

• Average total cost is at a minimum

• Marginal revenue equals marginal cost

• Price equals average variable cost

The principal on a loan taken out by a producer is:

• The present value of the loan

• The amount of the loan plus interest that still needs to be paid

• The lender

• The amount of money borrowed by the producer

If a producer decided to plant more acres of rice this year, which of the following costs would likely change the most?

• Crop insurance cost per acre

• Land rent per acre

• Fixed cost per acre

• Labor cost per acre