AGB 212 FINAL LOHMAR STUDY GUIDE 2026
microeconomics - Answers - economics of individual actors, consumers and producers
macroeconomic - Answers - economics of aggregating all these individual decisions
together into larger economy
opportunity cost - Answers - implicit cost associated with the next best alternative in a
set of choices available to decision makers (opportunity not taken)
scarcity - Answers - people have to make decisions due to scarcity (nothing is
unlimited)
specialization - Answers - separation of productive activities between persons or
geographic areas in such a manner that none of these persons or regions is completely
self sufficient
ceteris paribus - Answers - how a change in one thing will bring out a change in
another (holding everything constant)
Economics - Answers - social science that examines how people evaluate tradeoffs
personally then reconcile them with tradeoffs in the market
ag economics - Answers - Econ just applied to ag
indices - Answers - index of prices received or paid by producers usually compared to
a base year
CPI - Answers - measure of how all prices changed over the course of a year or from
one year to another value of market basket in given year or month/value of market
basket in base year or month
inflation - Answers - a broad rise in prices or the decline in the value of currency
real value - Answers - controls inflation. nominal value/cpi
nominal value - Answers - the actual number in currency without controlling for inflation
Engles law - Answers - as income rises, the proportion spent on food declines
current and changing structure to the us ag and food economy - Answers - number of
us farms is decreasing, sizes of farms increasing, land hasn't changed
, ag productivity and how and why its changed - Answers - farms tend to be specialized
rather than diverse, ag production has increased 2-2 1/2 times the size
ag supply chains - Answers - supply has increased due to improvement of technology
marginal analysis - Answers - behavior at the margins of where things stand at the
moment if one more of something is added
utility function - Answers - algebraic expression mapping bundles of goods into levels
of utility
indifference curves - Answers - connect consumption bundles to which consumers are
indifferent (no preference of same level of utility) downward, don't cross, convex to
origin
marginal utility - Answers - the effect on utility of an increase in consumption of one
unit of one good
marginal rate of substitution - Answers - slope of the indifference curve between good
a and b
budget constraint - Answers - limit you have on spending
budget line - Answers - everything you can afford shown on a graph
slope of the budget line - Answers - (Pa/Pb)
change in prices and income alter the budget constraint and line - Answers - if prices
decline you have more room in your budget line (vice versa) but does not shift the line
only moves it (only changes in total income or budget shift the line)
consumer choice equilibrium - Answers - the marginal utility per dollar spent on good 1
must equal the marginal utility per dollar spent on good 2.
how quantity demanded changes as price and income change - Answers - when
income increase, budget line will shift
complements - Answers - a good that is typically bought with another good
substitutes - Answers - a good that is picked over another similar good
normal goods - Answers - when consumption goes up as income goes up
inferior goods - Answers - goods where consumptions decreases as income increases
microeconomics - Answers - economics of individual actors, consumers and producers
macroeconomic - Answers - economics of aggregating all these individual decisions
together into larger economy
opportunity cost - Answers - implicit cost associated with the next best alternative in a
set of choices available to decision makers (opportunity not taken)
scarcity - Answers - people have to make decisions due to scarcity (nothing is
unlimited)
specialization - Answers - separation of productive activities between persons or
geographic areas in such a manner that none of these persons or regions is completely
self sufficient
ceteris paribus - Answers - how a change in one thing will bring out a change in
another (holding everything constant)
Economics - Answers - social science that examines how people evaluate tradeoffs
personally then reconcile them with tradeoffs in the market
ag economics - Answers - Econ just applied to ag
indices - Answers - index of prices received or paid by producers usually compared to
a base year
CPI - Answers - measure of how all prices changed over the course of a year or from
one year to another value of market basket in given year or month/value of market
basket in base year or month
inflation - Answers - a broad rise in prices or the decline in the value of currency
real value - Answers - controls inflation. nominal value/cpi
nominal value - Answers - the actual number in currency without controlling for inflation
Engles law - Answers - as income rises, the proportion spent on food declines
current and changing structure to the us ag and food economy - Answers - number of
us farms is decreasing, sizes of farms increasing, land hasn't changed
, ag productivity and how and why its changed - Answers - farms tend to be specialized
rather than diverse, ag production has increased 2-2 1/2 times the size
ag supply chains - Answers - supply has increased due to improvement of technology
marginal analysis - Answers - behavior at the margins of where things stand at the
moment if one more of something is added
utility function - Answers - algebraic expression mapping bundles of goods into levels
of utility
indifference curves - Answers - connect consumption bundles to which consumers are
indifferent (no preference of same level of utility) downward, don't cross, convex to
origin
marginal utility - Answers - the effect on utility of an increase in consumption of one
unit of one good
marginal rate of substitution - Answers - slope of the indifference curve between good
a and b
budget constraint - Answers - limit you have on spending
budget line - Answers - everything you can afford shown on a graph
slope of the budget line - Answers - (Pa/Pb)
change in prices and income alter the budget constraint and line - Answers - if prices
decline you have more room in your budget line (vice versa) but does not shift the line
only moves it (only changes in total income or budget shift the line)
consumer choice equilibrium - Answers - the marginal utility per dollar spent on good 1
must equal the marginal utility per dollar spent on good 2.
how quantity demanded changes as price and income change - Answers - when
income increase, budget line will shift
complements - Answers - a good that is typically bought with another good
substitutes - Answers - a good that is picked over another similar good
normal goods - Answers - when consumption goes up as income goes up
inferior goods - Answers - goods where consumptions decreases as income increases
