AGEC 315 Exam 1 Study
Which of the following represents a shift in the supply curve?
I. Consumers buy fewer burritos because of food safety concerns.
II. Beef prices decrease and farmers produce less beef.
III. A new variety of sorghum is introduced in Ethiopia that increases production. ✔️III. a new variety of
sorghum is introduced in Ethiopia that increases production
Which of the following represents a movement along the supply curve?
I. Farmers in the U.S. decrease the number of acres planted to wheat because wheat prices are low.
II. A new production technology increases corn production.
III. A new technology is introduced in South America that increases the number of cattle that can be fed
(i.e., produced) for the same cost. ✔️I. only
farmers in the U.S. decrease the number of acres planted to wheat because wheat prices are low
Which of the following represents a shift in the demand curve
I. An increase in incomes increases consumption of corn tortillas.
II. The Green Revolution dramatically increases crop yields.
III. Consumers buy fewer burritos because of food safety concerns. ✔️I. and III.
Which of the following represents a shift in the demand for corn tortillas?
I. An increase in incomes increases demand for corn tortillas.
II. A new production technology increases corn production.
III. The price of corn tortillas decreases. ✔️I only.
, an increase in income demand for corn tortillas
The demand curve for an individual corresponds to: ✔️marginal benefits
T or F: Supply is relatively elastic if small changes in prices cause relatively large changes in production.
✔️true
T or F: Demand is relatively inelastic if large changes in prices cause relatively small changes in
consumption. ✔️true
T or F: When supply is more elastic, the price of corn increases more from an increase in corn demand
due to an increase in ethanol production. (Hint: Draw a very inelastic supply curve and a shift in
demand. Next draw a very elastic supply curve and a shift in demand. For which case does the price of
corn increase more due to the demand shift?) ✔️false
Food prices have been decreasing over the past year. Which of the following is consistent with a
decrease in food prices? ✔️An increase in production by shifting the supply curve.
Stem rust is a disease that can severely affect wheat production. Consider a scenario where an outbreak
of stem rust reduces wheat production by 15% globally. Assume the supply elasticity for wheat is 0.4
and the demand elasticity is -0.3.
What is the percent change in the price of wheat due to stem rust? ✔️21.4% increase in price
0.15/(0.4+0.3)=
0.15/ 0.7=0.214x 100
= 21.4%
T or F: Food prices tend to be highly volatile because food supply and demand are highly inelastic.
✔️true
Which of the following represents a shift in the supply curve?
I. Consumers buy fewer burritos because of food safety concerns.
II. Beef prices decrease and farmers produce less beef.
III. A new variety of sorghum is introduced in Ethiopia that increases production. ✔️III. a new variety of
sorghum is introduced in Ethiopia that increases production
Which of the following represents a movement along the supply curve?
I. Farmers in the U.S. decrease the number of acres planted to wheat because wheat prices are low.
II. A new production technology increases corn production.
III. A new technology is introduced in South America that increases the number of cattle that can be fed
(i.e., produced) for the same cost. ✔️I. only
farmers in the U.S. decrease the number of acres planted to wheat because wheat prices are low
Which of the following represents a shift in the demand curve
I. An increase in incomes increases consumption of corn tortillas.
II. The Green Revolution dramatically increases crop yields.
III. Consumers buy fewer burritos because of food safety concerns. ✔️I. and III.
Which of the following represents a shift in the demand for corn tortillas?
I. An increase in incomes increases demand for corn tortillas.
II. A new production technology increases corn production.
III. The price of corn tortillas decreases. ✔️I only.
, an increase in income demand for corn tortillas
The demand curve for an individual corresponds to: ✔️marginal benefits
T or F: Supply is relatively elastic if small changes in prices cause relatively large changes in production.
✔️true
T or F: Demand is relatively inelastic if large changes in prices cause relatively small changes in
consumption. ✔️true
T or F: When supply is more elastic, the price of corn increases more from an increase in corn demand
due to an increase in ethanol production. (Hint: Draw a very inelastic supply curve and a shift in
demand. Next draw a very elastic supply curve and a shift in demand. For which case does the price of
corn increase more due to the demand shift?) ✔️false
Food prices have been decreasing over the past year. Which of the following is consistent with a
decrease in food prices? ✔️An increase in production by shifting the supply curve.
Stem rust is a disease that can severely affect wheat production. Consider a scenario where an outbreak
of stem rust reduces wheat production by 15% globally. Assume the supply elasticity for wheat is 0.4
and the demand elasticity is -0.3.
What is the percent change in the price of wheat due to stem rust? ✔️21.4% increase in price
0.15/(0.4+0.3)=
0.15/ 0.7=0.214x 100
= 21.4%
T or F: Food prices tend to be highly volatile because food supply and demand are highly inelastic.
✔️true
