Farm Management Final Exam Questions with Correct Answers| Latest Update
Guaranteed Success
1. If a farmer is producing at some point where MR is greater than MC and the amount of input
available is not limited:
a. -more input should be used to maximize profit
b. -profit is not being maximized
c. -all of the above
d. -more output should be produced to maximize profit All of the above
2. Cattle on feed should be marketed when:
a. -their marginal cost of gain is no longer below their original purchase price
b. -their average cost of gain is no longer below their selling price
c. -their marginal cost of gain is no longer below their selling price
d. -they have reached their maximum weight Thier marginal cost of gain is no longer below
thier selling price.
3. The long-run interest cost for an investment in a fixed asset is found by multiplying the
interest rate by the:
a. -initial purchase price of the asset
b. -average annual depreciation cost of the asset
c. -salvage value of the asset
d. -the average of the initial purchase price and the salvage value of the asset The average of
the initial purchase price and the salvage value of the assest
4. In the short run:
, a. -total costs are zero when there is no production
b. -total fixed costs are zero when there is no production
c. -total variable costs are zero when there is no production
d. -neither total fixed costs nor total variable costs are zero when there is no production
Total variable costs are zero when there is no production.
5. The Equal Marginal Principal should be used whenever:
a. -inputs are available in unlimited quantity
b. -there is only one possible use for an input
c. -a farmer wishes to maximize profit from one enterprise
d. -there is a limited amount of input available and there are several alternative uses for it
There is a limited amount of input and there are several alternative uses for it.
6. If the marginal physical product is decreasing as additional input is used, marginal cost will
be:
a. -constant
b. -increasing
c. -could be any of these
d. -decreasing Increasing
7. At the output level where MC is just equal to ATC:
a. -ATC is increasing
b. -ATC is at its minimum value
c. -ATC could be either increasing or decreasing
Guaranteed Success
1. If a farmer is producing at some point where MR is greater than MC and the amount of input
available is not limited:
a. -more input should be used to maximize profit
b. -profit is not being maximized
c. -all of the above
d. -more output should be produced to maximize profit All of the above
2. Cattle on feed should be marketed when:
a. -their marginal cost of gain is no longer below their original purchase price
b. -their average cost of gain is no longer below their selling price
c. -their marginal cost of gain is no longer below their selling price
d. -they have reached their maximum weight Thier marginal cost of gain is no longer below
thier selling price.
3. The long-run interest cost for an investment in a fixed asset is found by multiplying the
interest rate by the:
a. -initial purchase price of the asset
b. -average annual depreciation cost of the asset
c. -salvage value of the asset
d. -the average of the initial purchase price and the salvage value of the asset The average of
the initial purchase price and the salvage value of the assest
4. In the short run:
, a. -total costs are zero when there is no production
b. -total fixed costs are zero when there is no production
c. -total variable costs are zero when there is no production
d. -neither total fixed costs nor total variable costs are zero when there is no production
Total variable costs are zero when there is no production.
5. The Equal Marginal Principal should be used whenever:
a. -inputs are available in unlimited quantity
b. -there is only one possible use for an input
c. -a farmer wishes to maximize profit from one enterprise
d. -there is a limited amount of input available and there are several alternative uses for it
There is a limited amount of input and there are several alternative uses for it.
6. If the marginal physical product is decreasing as additional input is used, marginal cost will
be:
a. -constant
b. -increasing
c. -could be any of these
d. -decreasing Increasing
7. At the output level where MC is just equal to ATC:
a. -ATC is increasing
b. -ATC is at its minimum value
c. -ATC could be either increasing or decreasing
