ARE 433 Final Exam Study Set
In the U.S. crop insurance program, about how much of the typical crop insurance
premium is paid by the taxpayers? - ANSWER 60%
Which of the following is NOT a type of unit structure in federal crop insurance
programs? - ANSWER hail
The "death spiral of adverse selection" occurs when rates are raised to cover losses
that arise from inaccurate insurance premium rates. (T/F) - ANSWER True
Which of the following crop insurance plans is NOT a revenue insurance program? -
ANSWER Group Risk Plan (GRP)
The 2008 Farm Bill is moving away from conservation on working operations toward
land retirement programs. (T/F) - ANSWER False
Which of the following programs is not a program targeted to working lands? - ANSWER
Conservation Reserve Program (CRP)
The sodbuster provisions of the 1985 Farm Bill prevent farmers from converting highly
erodible land to production (by limiting eligibility for government program benefits)
without applying approved conservation measures. (T/F) - ANSWER True
The "3-Entity Rule" that was introduced in 1988 allowed a farm that was comprised of
three separate entities to collect 3 times the monetary program payments that a farm of
a single entity was entitled to. (T/F) - ANSWER False
Under the new ACRE program that was introduced in the 2008 Farm Bill, about what
percentage of base acreage ended up being enrolled by the signup deadline of August
14, 2009? - ANSWER 12.8%
The ACRE program substitutes (for the most part) for - ANSWER counter-cyclical
payments
The ACRE revenue guarantee is based on average revenues at what level? - ANSWER
State
The National Cattlemans' and Beef Association (NCBA) tends to favor free trade and
limited government intervention. (T/F) - ANSWER True
The excess-supply/excess-demand function must be more elastic than either the
domestic supply or demand function. (T/F) - ANSWER True
Under the 2008 Farm Bill, direct payments are now limited to $40,000 per person (where
two spouses can be treated as separate persons). (T/F) - ANSWER True
Approximately how many acres are currently enrolled in the CRP program? - ANSWER
, 36 Million
Which of the following programs accounts for the largest share of spending on domestic
food assistance? - ANSWER Supplemental Nutrition Assistance Program
The typical (average) Schedule F shows about how much in net income? - ANSWER
-$15,000
The higher than typical volatility of agricultural commodity prices reflects random
supply shocks and a very elastic demand for food commodities. (T/F) - ANSWER False
The "Agricultural Trade Crisis" of the early 1980s occurred in part due to depreciation
of the US dollar relative to other currencies. (T/F) - ANSWER False
Moral hazard refers to the case where farmers commit fraud by claiming losses they did
not actually have. (T/F) - ANSWER False
Systemic risk occurs when losses are - ANSWER positively correlated across insurance
contracts
The 2008 Farm Bill increased the eligible number of acres that can be enrolled in the
CRP program. (T/F) - ANSWER False
US agriculture typically runs a balance of payments deficit (i.e., imports more
agricultural products than it exports). - ANSWER False
The US/Brazil WTO cotton case determined that Step 2 payments were not in
compliance with the last WTO/GATT agreement. (T/F) - ANSWER True
The US land grant university system was established by the - ANSWER Morill Act
The PL-480 program did which of the following? - ANSWER established international
food aid and relief
"Double-AMTA Payments" was another way of describing: - ANSWER Market Loss
Assistance (MLA)
Farmers were allowed to update their base acreage under the terms of the - ANSWER
2002 Farm Bill
The reforms established under the most recent successful WTO/GATT agreement on
agriculture mandated reforms that were defined relative to what base year(s)? -
ANSWER 1986-1988
The most common form of business organization among US farms is - ANSWER Sole
Proprietor
The 2008 Farm Bill eliminated generic commodity certificates ("certs") as a means of
paying loan deficiency payments and marketing loan gains. (T/F) - ANSWER True
In the U.S. crop insurance program, about how much of the typical crop insurance
premium is paid by the taxpayers? - ANSWER 60%
Which of the following is NOT a type of unit structure in federal crop insurance
programs? - ANSWER hail
The "death spiral of adverse selection" occurs when rates are raised to cover losses
that arise from inaccurate insurance premium rates. (T/F) - ANSWER True
Which of the following crop insurance plans is NOT a revenue insurance program? -
ANSWER Group Risk Plan (GRP)
The 2008 Farm Bill is moving away from conservation on working operations toward
land retirement programs. (T/F) - ANSWER False
Which of the following programs is not a program targeted to working lands? - ANSWER
Conservation Reserve Program (CRP)
The sodbuster provisions of the 1985 Farm Bill prevent farmers from converting highly
erodible land to production (by limiting eligibility for government program benefits)
without applying approved conservation measures. (T/F) - ANSWER True
The "3-Entity Rule" that was introduced in 1988 allowed a farm that was comprised of
three separate entities to collect 3 times the monetary program payments that a farm of
a single entity was entitled to. (T/F) - ANSWER False
Under the new ACRE program that was introduced in the 2008 Farm Bill, about what
percentage of base acreage ended up being enrolled by the signup deadline of August
14, 2009? - ANSWER 12.8%
The ACRE program substitutes (for the most part) for - ANSWER counter-cyclical
payments
The ACRE revenue guarantee is based on average revenues at what level? - ANSWER
State
The National Cattlemans' and Beef Association (NCBA) tends to favor free trade and
limited government intervention. (T/F) - ANSWER True
The excess-supply/excess-demand function must be more elastic than either the
domestic supply or demand function. (T/F) - ANSWER True
Under the 2008 Farm Bill, direct payments are now limited to $40,000 per person (where
two spouses can be treated as separate persons). (T/F) - ANSWER True
Approximately how many acres are currently enrolled in the CRP program? - ANSWER
, 36 Million
Which of the following programs accounts for the largest share of spending on domestic
food assistance? - ANSWER Supplemental Nutrition Assistance Program
The typical (average) Schedule F shows about how much in net income? - ANSWER
-$15,000
The higher than typical volatility of agricultural commodity prices reflects random
supply shocks and a very elastic demand for food commodities. (T/F) - ANSWER False
The "Agricultural Trade Crisis" of the early 1980s occurred in part due to depreciation
of the US dollar relative to other currencies. (T/F) - ANSWER False
Moral hazard refers to the case where farmers commit fraud by claiming losses they did
not actually have. (T/F) - ANSWER False
Systemic risk occurs when losses are - ANSWER positively correlated across insurance
contracts
The 2008 Farm Bill increased the eligible number of acres that can be enrolled in the
CRP program. (T/F) - ANSWER False
US agriculture typically runs a balance of payments deficit (i.e., imports more
agricultural products than it exports). - ANSWER False
The US/Brazil WTO cotton case determined that Step 2 payments were not in
compliance with the last WTO/GATT agreement. (T/F) - ANSWER True
The US land grant university system was established by the - ANSWER Morill Act
The PL-480 program did which of the following? - ANSWER established international
food aid and relief
"Double-AMTA Payments" was another way of describing: - ANSWER Market Loss
Assistance (MLA)
Farmers were allowed to update their base acreage under the terms of the - ANSWER
2002 Farm Bill
The reforms established under the most recent successful WTO/GATT agreement on
agriculture mandated reforms that were defined relative to what base year(s)? -
ANSWER 1986-1988
The most common form of business organization among US farms is - ANSWER Sole
Proprietor
The 2008 Farm Bill eliminated generic commodity certificates ("certs") as a means of
paying loan deficiency payments and marketing loan gains. (T/F) - ANSWER True
