AGR213 Agriculture Econ Overview Exam 2025

4- In the short run a firm will shut down if - MR is less than minimum AVC 4- The output level that maximizes profit is found where - (the added revenue from selling an additional unit of output is equal to the additional cost of producing that unit of input. The slope of the total cost curve is equal to the slope of the total revenue line. MR=MC) All of the above 4- If Py increases and costs of production remain unchanged the profit maximizing firm will - will increase output until the new MR is equal to the MC 4- A profit maximizing firm will produce where - (the additional value of output from using another unit of input is equal to the cost of using that unit of input. The difference between total revenues and total costs is largest. MR=MC) All of the above 4- To find the profit maximizing level of input use a firm must know - MPP. Py and Px 4- An increase in a tax on an input will result in - a decrease in input use and a decrease in output 4- The firms demand curve for a factor is - MRP in Stage 2 4- Perfect competition is an important assumption in economice because it is used to assume - prices are fixed 4- The break even point is - always greater then the shutdown point in the short run 4- Profit on a per unit basis is calculated as - the difference between average total cost and marginal revenue 4-PF1- The pizza restaurant should stay in business as long as - price is greater that ATC 4-PF1- The profit maximizing level of pizza is found where - MR=MC. And MC cuts MR from below 4-PF2- The units for X are - hrs 4-PF2- The units for TRP are - $ 4-PF2- The units for MRP are - $/hr 4-PF2- The units for MFC are - $/hr 4-PF3- Of the inputs for Tom listed below what is the most likely to be a fixed cost - rent on factory 4-PF3- Tom has what type of cost structure - typical 4-PF3- The MC for Toms Tortillas represents - additional costs of production for one more tortilla 4-PF3- Suppose Tom is earning zero economic profit Tom - is earning as much as he is worth 4- A pineapple grower with positive economic profit might stay in business because - she is making more than she could earn in the next best alternative 4- A dairy farmer with negative economic profit might stay in business because - she prefers farming over other occupations 4- For a perfectly competitive firm prices are - fixed and given 4- Perfect competition assumes all expect the following - profits 5- Most inputs in production processes can be - substituted for each other but not perfectly 5- Perfect substitutes in production have - straight line isoquants 5- The cost minimizing combination of inputs can be found at - the tangency point of the isoquant and the isocost line 5- Perfect complements are - used together in production 5- An isoquant is defined in economics as a line indicating all combinations of two variable inputs that will produce - the same level of output 5- If an isoquant intersects and isocost line at two points a manager can surmise that - there is lower isocost line where the isoquant will intersect at only one point 5- Agricultural firms will adjust the level of input use based on - changes in relative prices 5- To determine the profit maximizing level of production with two inputs the manager must know - the marginal rate of technical substitution and the price ratio 5- The traditional convex isoquant that is associated with agricultural production processes gets its shape from - the diminishing returns in the production function 5- A manager can minimize production costs by operating at a point where - the isoquant is tangent to the isocost line 5- Perfect sustainability of inputs is - possible in agribusiness firms but not common 5- An isoquant that is convex to the origin and negatively sloped depicts - imperfect sustainability 5- Efficient use of two inputs in the production process will depend on - prices and productivity of both inputs 5- The marginal rate of technical substitution between two inputs in a single production process describes - none of the other three answers 5- Managers of agribusiness firms can substitute inputs in the production process to maintain output - both in the short run and the long run 5- For US agriculture labor may be substituted for capitol in production but labor - none of the above 5- Two isoquants can never - intersect 5- Which equation best represents an isoquant - Y=f(A.K|L. M) 5- In the graph of an isoquant there are - inputs on both axes 5- An isoquant is - all combinations of two inputs that produce the same level of output 5- An isoquant demonstrates that - a large number of combinations of inputs can produce the same level of output 5- Research at agricultural universities results in - more capital intensive production practices in agriculture 5- In Sub-Saharan Africa the choice of labor over machines is due to - relative prices 5- Coke and Pepsi will purchase sucrose or fructose based on - relative prices 5- Computers and computer operators are - complements in the production of databases 5- A typical isoquant is - convex to the origin reflecting imperfect substitutes 5- An isoquant shape is derived from - the Law of Diminishing Marginal Returns 5- The slop of the isoquant is - the marginal rate of technical substitution 5- In equilibrium - (the slope of the isoquant is equal to the slope of the isocost line. The MRTS = price ratio.