AGEC Exam 1 Study Guide 2026 | Complete Review, Practice Questions & Exam
Prep
Agricultural economics is an applied science that deals with: - ANS ✔✔how producers use
scarce resources;
how consumers and society use scarce resources;
the production, processing, and marketing of food and fiber products;
the consumption of food and fiber products and natural resources
Trends seen in agricultural include all of the following EXCEPT: - ANS ✔✔Increasing amount of
food expenditures attributed to food produced at home
The _ is the portion of the food expenditures associated with activities beyond the farm gate. -
ANS ✔✔Marketing Bill
Perfect competition applies when four of the following conditions are met. Which condition is
not required? - ANS ✔✔The item traded must be a physical product and not a non-physical
(service) item
A student club wants to raise its income to cover its costs. The club's income comes from
membership fees and from selling tickets to its football tailgates. Attendance at the tailgates
currently leads to overcrowding of the space allowed. The demand for membership is price
inelastic and the demand for tailgates is price elastic. To reduce the crowding at the tailgates
without changing its total income, what should the club do? - ANS ✔✔Raise both tailgate ticket
price (increase revenue) and the membership fee (reduce overcrowding)
_ effect of a price change is the change in quantity attributed solely to the change in the price
ratio between two goods. - ANS ✔✔Substitution
, The price of a product increases from 12 pesos to 20 pesos and the quantity demanded falls
from 55 a week to 45 a week, what is the own-price elasticity of demand? - ANS ✔✔-0.4
Given the demand curve, correctly label the segments given by the blank lines from the top to
the bottom blank. - ANS ✔✔elastic, unitary, inelastic
Which of the following statements about the market demand curve for a product is false? - ANS
✔✔The market demand curve may shift if there is a change in price of the product.
If we compare the changes in total variable costs (TVC) and total costs (TC) as an additional unit
of output is produced: - ANS ✔✔The changes in total variable cost (TVC) and total costs (TC) as
an additional unit of output is produced.
Kroger is having a sale on pork tenderloin. As a result, you decide to buy fewer chickens this
week. Assuming that pork and chickens are normal goods, which of the following best describes
the situation? - ANS ✔✔For the consumption of pork, the substitution effect is negative and the
income effect is positive.
Given the situation in question 11, we can conclude: - ANS ✔✔The cross-price elasticity is
positive - the goods are substitutes
A producer lowers the price of a good from A to B. Which area represents the loss in revenue
from the price decrease? (See exam diagram) - ANS ✔✔AEGB
Why do producers experience loss in Question 13? - ANS ✔✔For the amount of goods sold
before the price change, the price is now lower.
Which are represents total consumer surplus associated with the new price? Is there a gain or
loss of consumer surplus associated with the price change? - ANS ✔✔BFJ - gain
Prep
Agricultural economics is an applied science that deals with: - ANS ✔✔how producers use
scarce resources;
how consumers and society use scarce resources;
the production, processing, and marketing of food and fiber products;
the consumption of food and fiber products and natural resources
Trends seen in agricultural include all of the following EXCEPT: - ANS ✔✔Increasing amount of
food expenditures attributed to food produced at home
The _ is the portion of the food expenditures associated with activities beyond the farm gate. -
ANS ✔✔Marketing Bill
Perfect competition applies when four of the following conditions are met. Which condition is
not required? - ANS ✔✔The item traded must be a physical product and not a non-physical
(service) item
A student club wants to raise its income to cover its costs. The club's income comes from
membership fees and from selling tickets to its football tailgates. Attendance at the tailgates
currently leads to overcrowding of the space allowed. The demand for membership is price
inelastic and the demand for tailgates is price elastic. To reduce the crowding at the tailgates
without changing its total income, what should the club do? - ANS ✔✔Raise both tailgate ticket
price (increase revenue) and the membership fee (reduce overcrowding)
_ effect of a price change is the change in quantity attributed solely to the change in the price
ratio between two goods. - ANS ✔✔Substitution
, The price of a product increases from 12 pesos to 20 pesos and the quantity demanded falls
from 55 a week to 45 a week, what is the own-price elasticity of demand? - ANS ✔✔-0.4
Given the demand curve, correctly label the segments given by the blank lines from the top to
the bottom blank. - ANS ✔✔elastic, unitary, inelastic
Which of the following statements about the market demand curve for a product is false? - ANS
✔✔The market demand curve may shift if there is a change in price of the product.
If we compare the changes in total variable costs (TVC) and total costs (TC) as an additional unit
of output is produced: - ANS ✔✔The changes in total variable cost (TVC) and total costs (TC) as
an additional unit of output is produced.
Kroger is having a sale on pork tenderloin. As a result, you decide to buy fewer chickens this
week. Assuming that pork and chickens are normal goods, which of the following best describes
the situation? - ANS ✔✔For the consumption of pork, the substitution effect is negative and the
income effect is positive.
Given the situation in question 11, we can conclude: - ANS ✔✔The cross-price elasticity is
positive - the goods are substitutes
A producer lowers the price of a good from A to B. Which area represents the loss in revenue
from the price decrease? (See exam diagram) - ANS ✔✔AEGB
Why do producers experience loss in Question 13? - ANS ✔✔For the amount of goods sold
before the price change, the price is now lower.
Which are represents total consumer surplus associated with the new price? Is there a gain or
loss of consumer surplus associated with the price change? - ANS ✔✔BFJ - gain
