AGEC 2003 final exam questions with
verified answers
Suppose the own price elasticity of demand for oranges is -1.00. Is the own price elasticity of
demand for oranges perfectly inelastic, perfectly elastic, relatively inelastic, relatively elastic, or
unitary elastic? - correct answer ✔✔unitary elastic
In what ways to agricultural industries differ from other industries? - correct answer
✔✔produce homogenous products, cyclical nature of agricultural production, perishable
product, seasonality
social science that deals with how people make choices and the production and distribution of
food and fiber to society - correct answer ✔✔agricultural economics
8 trends affecting agriculture - correct answer ✔✔changes in the economic size classes of
farms, increased farm output due to population growth, increased vertical coordination,
globalization of agriculture, environmentalism, food safety, changing tastes and preferences,
urbanization of agricultural land
factors that can cause a change in demand, or a shift in the demand curve - correct answer
✔✔changes in consumer income, population, consumer tastes and preferences, related
product prices, people's expectations of future prices
a factor that can cause a change in quantity demanded, or a shift along the demand curve -
correct answer ✔✔changes in own price of the product
two factors that influence the own price elasticity of demand for a product - correct answer
✔✔whether good substitutes are available for the product and whether the product represents
a relatively large percentage of the consumer's budget
, With greater consumption of a good, what is generally true? - correct answer ✔✔total utility
increases and marginal utility decreases
what is the law of diminishing marginal utility? - correct answer ✔✔as an individual consumes
additional units of good, ceteris paribus, the amount of satisfaction from each additional unit of
that good decreases
what shape are indifference curves for two goods? - correct answer ✔✔convex to the origin
what is the input demand function? - correct answer ✔✔MVP in stage II
an isoquant for perfect complements can be best described as what - correct answer ✔✔a right
angle
The slope of the isocost line is determined as what? - correct answer ✔✔the ratio of the prices
of two inputs
What is an expansion path? - correct answer ✔✔it connects the most profitable points for each
of a number of PPCs and connects the least cost combinations for each of a number of
isoquants
cost for which there is no cash outlay at the time a resource is used - correct answer ✔✔implicit
cost
Where is the profit maximizing level of output found? - correct answer ✔✔MR=MC
AVC reaches its minimum at the level of output where: - correct answer ✔✔AVC=MC; a ray
from the origin is tangent to TVC
verified answers
Suppose the own price elasticity of demand for oranges is -1.00. Is the own price elasticity of
demand for oranges perfectly inelastic, perfectly elastic, relatively inelastic, relatively elastic, or
unitary elastic? - correct answer ✔✔unitary elastic
In what ways to agricultural industries differ from other industries? - correct answer
✔✔produce homogenous products, cyclical nature of agricultural production, perishable
product, seasonality
social science that deals with how people make choices and the production and distribution of
food and fiber to society - correct answer ✔✔agricultural economics
8 trends affecting agriculture - correct answer ✔✔changes in the economic size classes of
farms, increased farm output due to population growth, increased vertical coordination,
globalization of agriculture, environmentalism, food safety, changing tastes and preferences,
urbanization of agricultural land
factors that can cause a change in demand, or a shift in the demand curve - correct answer
✔✔changes in consumer income, population, consumer tastes and preferences, related
product prices, people's expectations of future prices
a factor that can cause a change in quantity demanded, or a shift along the demand curve -
correct answer ✔✔changes in own price of the product
two factors that influence the own price elasticity of demand for a product - correct answer
✔✔whether good substitutes are available for the product and whether the product represents
a relatively large percentage of the consumer's budget
, With greater consumption of a good, what is generally true? - correct answer ✔✔total utility
increases and marginal utility decreases
what is the law of diminishing marginal utility? - correct answer ✔✔as an individual consumes
additional units of good, ceteris paribus, the amount of satisfaction from each additional unit of
that good decreases
what shape are indifference curves for two goods? - correct answer ✔✔convex to the origin
what is the input demand function? - correct answer ✔✔MVP in stage II
an isoquant for perfect complements can be best described as what - correct answer ✔✔a right
angle
The slope of the isocost line is determined as what? - correct answer ✔✔the ratio of the prices
of two inputs
What is an expansion path? - correct answer ✔✔it connects the most profitable points for each
of a number of PPCs and connects the least cost combinations for each of a number of
isoquants
cost for which there is no cash outlay at the time a resource is used - correct answer ✔✔implicit
cost
Where is the profit maximizing level of output found? - correct answer ✔✔MR=MC
AVC reaches its minimum at the level of output where: - correct answer ✔✔AVC=MC; a ray
from the origin is tangent to TVC
