The Uniqueness of Agriculture

Which of the following is a reason why agricultural production is unstable from year to year?

Weather
Pests
Diseases
All of the above (correct)

Why is storage limited for some agricultural products?

Perishability of some products
Significant cost of storage
Both A and B (correct)
None of the above

What is a consequence of biological lags in production?

Production can be sped up or slowed down
Production is not affected by time
Production is stable year to year
None of the above (correct)

What is a scarce resource in agriculture that cannot be increased?

Land (B) Signup and view all the answers

Why is there limited opportunities for managing supply in agriculture?

All of the above (D) Signup and view all the answers

Which of the following is NOT a biological condition affecting agriculture?

Market conditions (B) Signup and view all the answers

What is the purpose of storage in agriculture?

To manage supply (A) Signup and view all the answers

Which of the following is an example of a product with limited opportunities for reserves?

Fresh vegetables (C) Signup and view all the answers

What is the main reason for large annual yield fluctuations in agriculture?

All of the above (D) Signup and view all the answers

What is a consequence of the tie to the land in agriculture?

Increased competition for agricultural resources (A) Signup and view all the answers

Which factor contributed to the growth in U.S. farm sector output between 1948 and 2017?

Increase in total factor productivity (C) Signup and view all the answers

What does Total Factor Productivity (TFP) growth measure?

The rate of growth of total output (C) Signup and view all the answers

What does productivity measure in agriculture?

Changes in the efficiency with which inputs are transformed into outputs (A) Signup and view all the answers

What can affect measured agricultural productivity in the short term?

Random events like weather (C) Signup and view all the answers

What does Total Factor Productivity (TFP) encompass?

The average productivity of all inputs employed in the production of all crop and livestock commodities (B) Signup and view all the answers

What is the result of total consumption for agricultural products over time?

It does not change much (B) Signup and view all the answers

What is the result of certain products' demand over time?

It increases significantly (A) Signup and view all the answers

What is the main reason for the week bargaining power of individual producers in agriculture?

Relatively homogeneous products (C) Signup and view all the answers

Why is asset fixity a challenge for farms?

It is difficult to dispose of capital equipment when downsizing or shutting down the business (C) Signup and view all the answers

Why is world trade in agricultural products relatively small?

Trade policy restrictions (A) Signup and view all the answers

According to the text, what are the four assumptions of the cobweb phenomena?

i) There is a time lag before production responses to a price change ii) There are no reserves iii) Producers plan their future production based on current prices iv) Market prices are determined by the amount supplied with immediate adoption (B) Signup and view all the answers

What does the production function show?

The relationship between quantity of inputs used to make a good and the quantity of that good output (A) Signup and view all the answers

What are the two types of production functions mentioned in the text?

Biological and nonbiological production functions (C) Signup and view all the answers

What does the agricultural (biological) production function measure?

Quantity of output (bushels corn per acre) (A) Signup and view all the answers

In a dry year, what is the range of pounds of nitrogen per acre in the typical production function?

20 to 100 (B) Signup and view all the answers

What are the three special conditions of agriculture mentioned in the text?

Biological conditions, structural conditions, market conditions (A) Signup and view all the answers

What is the most correct definition of the cobweb phenomena?

Cyclical fluctuations in trade and production (C) Signup and view all the answers

What is the relationship between the quantity of inputs and the quantity of output in a production function?

The quantity of output increases as the quantity of inputs increases (B) Signup and view all the answers

What is the correct formula for the non-biological production function?

$f(x) = 2x$ where $x$ is the quantity of inputs (C) Signup and view all the answers

What is the correct formula for the agricultural (biological) production function?

$f(x) = x^2$ where $x$ is the quantity of inputs (A) Signup and view all the answers