1
AGEC 325 Exam 3 Questions with Answers (100%
Correct Answers)
In whole farm planning it is assumed that when ___________ is
maximized, total profit is also maximized. Answer: total gross margin
The purpose of completing a whole farm budget is: Answer: to
estimate the net income from all enterprises combined
Sensitivity analysis looks at the change in total profit caused by:
Answer: any of the above
-a change in selling prices
-a change in yields
-a change in the price of key input
The purpose of liquidity analysis is to estimate if: Answer: cash
inflows will be sufficient to meet expected cash outflows
A whole-farm budget contains Answer: costs, returns, and resource
needs for a specific set of enterprises
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, 2
If an acre of alfalfa requires $75 of operating capital and 5 hours of
labor, and a farm has 70 acres of land, 400 hours of labor, and $4,500 of
operating capital available, the maximum acres of alfalfa that can be
grown is: Answer: 60
Which of the following may be included on a partial budget? Answer:
ownership costs
operating costs
opportunity costs
all of the above
Which of the following are the profit increasing changes on a partial
budget? Answer: reduced costs and additional revenue
A partial budget is designed to analyze the effect of a proposed
management change on Answer: profit
On a partial budget which analyzes switching 120 acres from growing
wheat to growing barley, which of the following costs would not be
included on the budget? Answer: property tax on the land
© 2025 All rights reserved
AGEC 325 Exam 3 Questions with Answers (100%
Correct Answers)
In whole farm planning it is assumed that when ___________ is
maximized, total profit is also maximized. Answer: total gross margin
The purpose of completing a whole farm budget is: Answer: to
estimate the net income from all enterprises combined
Sensitivity analysis looks at the change in total profit caused by:
Answer: any of the above
-a change in selling prices
-a change in yields
-a change in the price of key input
The purpose of liquidity analysis is to estimate if: Answer: cash
inflows will be sufficient to meet expected cash outflows
A whole-farm budget contains Answer: costs, returns, and resource
needs for a specific set of enterprises
© 2025 All rights reserved
, 2
If an acre of alfalfa requires $75 of operating capital and 5 hours of
labor, and a farm has 70 acres of land, 400 hours of labor, and $4,500 of
operating capital available, the maximum acres of alfalfa that can be
grown is: Answer: 60
Which of the following may be included on a partial budget? Answer:
ownership costs
operating costs
opportunity costs
all of the above
Which of the following are the profit increasing changes on a partial
budget? Answer: reduced costs and additional revenue
A partial budget is designed to analyze the effect of a proposed
management change on Answer: profit
On a partial budget which analyzes switching 120 acres from growing
wheat to growing barley, which of the following costs would not be
included on the budget? Answer: property tax on the land
© 2025 All rights reserved
