Agecon Test Review

Front 1

Consider a futures contract that is worth $10 ifOSU beats Nebraska in men’s basketball. It is worth zero otherwise. If youbelieve OSU has a 70% chance of winning, you should be willing to…

Back 1

Buy at less than $7 and/or sell at more than $7

Front 2

Consider a futures contract that is worth $10 ifOSU beats Nebraska in men’s basketball. It is worth zero otherwise. If youbelieve OSU has a 30% chance of winning, you should be willing to…

Back 2

Buy at less than $3 and/or sell at more than $3

Front 3

Consider a futures contract that is worth $20 ifOSU beats Nebraska in men’s basketball. It is worth zero otherwise. If youbelieve OSU has a 70% chance of winning, you believe the contract’s value is

Back 3

$14

Front 4

Consider a futures contract that is worth $50 ifOSU beats Nebraska in men’s basketball. It is worth zero otherwise. If youbelieve OSU has a 50% chance of winning, you believe the contract’s value is

Back 4

$25.00

Front 5

Consider a futures contractthat is worth $10 if OSU beats Nebraska in men’s basketball. If someone iswilling to sell it for $4 that implies

Back 5

They believe OSU has less than a 40% chance of winning

Front 6

Consider a futures contract that is worth $10 ifOSU beats Nebraska in men’s basketball. If you buy a contract for $4 and thensell a contract for $7, and OSU wins, what are your profits?

Back 6

You earn $3

Front 7

Consider a futures contract that is worth $10 ifOSU beats Nebraska in men’s basketball. If you buy a contract for $4 and thensell a contract for $6, and OSU loses, what are your profits?

Back 7

You earn $2

Front 8

Consider a futures contract that is worth $10 ifOSU beats Nebraska in men’s basketball. If you buy a contract for $4 and thatis the only transaction you make, and OSU wins, what are your profits?

Back 8

You earn $6

Front 9

Consider a futures contract that is worth $10 ifOSU beats Nebraska in men’s basketball. If you sell a contract for $8 and thatis the only transaction you make, and OSU wins, what are your profits?

Back 9

You lose $2

Front 10

If someone sells a July 2017 Wheat futurescontract, hoping to buy the same contract back at a lower price later, they are

Back 10

Going Short

Front 11

If someone sells a July 2017 Wheat futurescontract, believing prices will rise, they are

Back 11

There is no term for this, or, this strategy does not make sense

Front 12

True orFalse? In order for someone to sell a July 2017 Wheat futures contract theymust first buy 5,000 bushels of wheat

Back 12

False

Front 13

True orFalse? In order for someone to buy a July 2017 Wheat futures contract theymust first eventually take ownership of 5,000 bushels of wheat.

Back 13

False

Front 14

What kind of wheat is traded in Kansas CityBoard of Trade futures?

Back 14

Hard Red Winter Wheat

Front 15

How much is a bushel?

Back 15

9.3 Gal

Front 16

Of the intellectual contributors to economicsbelow, which is the oldest (that is, who was the first to live)?

Back 16

Quesnay

Front 17

1. Which of the following individual’s contributionwas to write the Wealth of Nations?

Back 17

Adam South

Front 18

1. Which of the following individual’s contributionwas to suggest changing ‘political economy’ to ‘economics’?

Back 18

Alfred Marshall

Front 19

If an economist argues that we should privatizefish in the ocean by giving fishermen quotas on the total amount they may catchin a year, she is practicing __________ economics.

Back 19

Normative

Front 20

When the ancient Greek’s used their version ofthe word ‘economics’, which was Oikonomia, it referred to

Back 20

The management of household estate

Front 21

Dr. Norwood’s definition of economics is muchsimpler and shorter than the typical definition.

Back 21

This is false, Dr. Norwood’s is longer and more complex

Front 22

When Louis XV, King of France, followed theadvice of his Les Économists, itbenefitted the economy for a while but eventually led to food problems. Whatwas this advice that he followed?

Back 22

Allow free trade and flexible prices.

Front 23

According to an A&E documentary, Adam Smith is the 3rd most influential person of the second millennial.

Back 23

False, he was the 20th most important person

Front 24

Why did Uzbekistans leave their stoves running24/7 during the 1980s?

Back 24

Because natural gas was free and matches were scarce

Front 25

When economists argued that slavery should beended, Thomas Carlyle deemed economics to be

Back 25

Dismal Science

Front 26

Economics, according to Dr.Norwood, has a particular interest in making self-interest

Back 26

Harmonious with social interest

Front 27

Economics, according to Dr. Norwood, isconcerned only with monetary prosperity.

Back 27

False

Front 28

People generally have unlimited wants

Back 28

True

Front 29

Economists generally allow individuals to decidewhat is best for themselves when it comes to their own happiness

Back 29

True

Front 30

About two centuries ago the British learned theonly way to force ship captains to keep prisoners being transported toAustralia alive during the voyage was to design strict regulations and have asoldier aboard the ship.

Back 30

False

Front 31

What famous economist is on British currency,according to the show Todd Margaret?

Back 31

Adam Smith

Front 32

To encourage sustainable fishing, we triedlimiting the days in which people could catch fish, but this didn’t workbecause

Back 32

Fishermen invested in better equipment that would allow them toincrease their catch of fish during those days.

Front 33

What policy finally resulted in sustainablefishing?

Back 33

Using catch shares, where individual fisherman are given the right tocatch only a certain number (or a certain proportion) of the fish population.

Front 34

What is the term for a situation where aresource is shared, but some individuals exploit the resource at the expense ofeveryone?

Back 34

Tragedy of the commons

Front 35

Which of the following examples suffer from theTragedy of the Commons?

Back 35

a. Aquifer use in the Midwestern U.S.b. Public bathrooms in New Yorkc. Grazing lands for reindeer in Finlandd. Soil erosion in the U.S.e. Both a and bf. Both c and d

Front 36

Why isn’t soil erosion on privately owned farmsin the U.S. considered a Tragedy of the Commons?

Back 36

a. Because some soil erosion is unavoidable, so itis not a tragedy we can helpb. Because the soil is owned by the farmerc. Because the farmer, like society, pays the costof soil erosiond. a, b, and ce. both b and c

Front 37

The case of reindeer grazing lands in Finlandprove that you cannot expect large groups of people to be able to properlycoordinate the use of a shared resource

Back 37

False

Front 38

If Ogallala aquifer users in the Midwestern U.S.were to adopt Finland reindeer farmers’ approach to share resources, they wouldMeetand agree on how much water

Back 38

Meet and agree on how much water each farmer extracts in a year

Front 39

Looking back at the long arc of history, whenworld population rises per person wealth

Back 39

Falls

Front 40

Which regions have been particularly stellar ingenerating prosperity throughout the last two centuries?

Back 40

Western Europe

Front 41

In the book AHistory of World Agriculture, Mazoyer and Roudart credit the rise in humanpopulations to three main agricultural events

Back 41

1) Neolithic agriculture (2) irrigation agriculture and (3) motorized,mechanized, and chemicalized agriculture

Front 42

How many of the following statements are true:(1) the U.S. produces more nutrients per capita for almost every nutrientcompared to a century ago (2) the number of people living in extreme poverty isrising (3) the number of people not living in extreme poverty is rising

Back 42

2

Front 43

In class we discussed four cases where nationshad trouble feeding itself: ancient Athens, 1950s China, recent North Korea,and contemporary Venezuela. How many of these three cases was the problempolitical in nature?

Back 43

3

Front 44

What is the best way to measure agriculturalproductivity?

Back 44

Amount of food produced per hour of labor

Front 45

The case of North and South Korea demonstratesthat two countries can have similar food problems despite drastically differentpolitical systems.

Back 45

False

Front 46

Why does North Korea allow its citizens to watchGone With the Wind?

Back 46

To inspire them to preserve during times of food shortages

Front 47

In warfare, even if one country is the clearvictor, damage is done to both countries. This makes warfare a

Back 47

Negative Sum Game

Front 48

If Paul robs Peter,stealing $10, that is a

Back 48

Zero-sum game

Front 49

If Paul fears Peter will attempt to rob him, andPeter thus pays thugs to protect him, that is a

Back 49

Negative-Sum Game

Front 50

Which of the following items is necessary forpeople and businesses to specialize?

Back 50

Trade

Front 51

Why is specialization so important for foodproduction?

Back 51

It increases efficiency

Front 52

Decentralization is important because ______ isdispersed throughout an economy

Back 52

Information

Front 53

Why are prices an important part ofdecentralized decision making

Back 53

They are good communicators of information

Front 54

Ancient Athens was unique in that it requiredits politicians to also be businesspeople

Back 54

False

Front 55

What is the term referring to the process bywhich immigration, trade, and technology eliminates jobs in one sector whilecreating new jobs in other sectors?

Back 55

Creative Destruction

Front 56

During the age of Voltaire (18thCentury) both England and France had the utmost respect for “the commerciallife and the diversity of religion”.

Back 56

False

Front 57

In North Korea today

Back 57

Citizens rely on market exchanges for food

Front 58

The world does not produce enough calories tofeed the world population

Back 58

False

Front 59

In the U.S. about _____ of households haveserious food security problems.

Back 59

5%

Front 60

What is the major cause of the Irish famine in1845-1852?

Back 60

Landowners exporting much of the food its tenants produced

Front 61

Why are much of Mongoliangrasslands being destroyed?

Back 61

Excessive grazing of cashmere goats

Front 62

In the U.S., soil erosion

Back 62

Still occurs but the rate of erosion is falling

Front 63

Why is the rate of soil erosion falling?

Back 63

More awareness and concernb. Better technologiesc. Less rainfalld. Both a and be. a, b, and c

Front 64

No society has been able to feed itself without privateproperty and markets.

Back 64

False

Front 65

What is the main cause of the Great Enrichment?

Back 65

Cultural Changes

Front 66

Which of the following cultural change isassociated with the Great Enrichment?

Back 66

Belief in equality of people

Front 67

Which of the following best explains the currentfood provision problems in Venezuela?

Back 67

Price controls and confiscation of farms

Front 68

How many items in the following list played arole in creating food shortages in Venezuela? (1) High oil prices (2) Death ofHugo Chavez (3) New constitution that does not address food (4) Price controls(5) Confiscation of farms (6) import tariff on dairy products

Back 68

2

Front 69

How did price controlscreate food shortages in Venezuela

Back 69

Because producers could only sell at low prices they had no incentiveto produce foodBecause

Front 70

If the Bolivarian Revolution began by HugoChavez resulted in the policies causing the current food shortages, what wasthe reason for the initial support of the Revolution, and why do many peoplestill support it?

Back 70

Before Hugo Chavez a large portion of the poor were marginalized

Front 71

One obstacle to food provision in Venezuela isthat their constitution does not address food issues?

Back 71

False

Front 72

In response to food provision problems inVenezuela the current president urged households to

Back 72

Begin producing their own eggs by raising chickens

Front 73

The Parable of the Magic Island is intended todemonstrate that what is akin tomagic, in that you can acquire a permanent increase in wealth by paying only atemporary economic adjustment cost?

Back 73

Technological improvments

Front 74

The Parable of the Magic Island is intended todemonstrate that what is akin tomagic, in that you can acquire a permanent increase in wealth by paying only atemporary economic adjustment cost?

Back 74

Trade

Front 75

Which of the following pose similar benefits andcosts as trade with other nations?

Back 75

Technological improvements

Front 76

Has trade with China harmed any particularsegment of Americans more than others?

Back 76

low skill level and uneducated workers are harmed

Front 77

If the price of good A is $100 and the price ofgood B is $20, what is the opportunity cost of good A in terms of good B?

Back 77

5 units of good B

Front 78

If the price of good A is $500 and the price ofgood B is $400, what is the opportunity cost of good B in terms of good A?

Back 78

4/5 units of good A

Front 79

The term ‘PPF’ stands for

Back 79

Production possibilities frontier

Front 80

A country has a comparative advantage in theproduction of sugar, compared to another country, if it can

Back 80

Produce the sugar at a lower opportunity cost

Front 81

Supposethat, initially, the US and EU do not engage in trade. In autarky, the U.S.produces and consumes 1,000 Meat and 2,000 Veggies, while the EU produces andconsumes 1,500 Meat and 2,000 Veggies. Once they engage in trade, the USproduces 4,500 Veggies and no Meat, while the EU produces no Veggies and 3,000Meat. Will both regions be better off if the U.S. and EU traded 2,000Veggies for 1,000 Meat? (Note: If I don’t say a country loses or gains any Meator Veggies you may assume they have the same amount of the good.)

Back 81

Yes, the U.S. gains 500 veggies and the EU gains a certain amount ofveggies

Front 82

Two countries, trading two goods, are said togain from trade if …

Back 82

They both get more of at least one good without giving up any units ofthe other good

Front 83

Being able to trade allows regions to producelarge amounts of a crop, and that allows them to increase their productivity by… ?

Back 83

a. Specializing and honing their skillsb. Afford new technologies

Front 84

The first U.S. patent was awarded to SamuelHopkins in 1790 for a new way of acquiring potash (a fertilizer and ingredientin soap production).

Back 84

True

Front 85

There needs to be some differences between twocountries, like different climates or resources, before they can gain fromtrade.

Back 85

F

Front 86

In reality, exports from a country are alwaysless than its imports

Back 86

False

Front 87

Even though many of an iPhone’s components comefrom many different countries, our trade statistics count the iPhone as

Back 87

CHinese Export

Front 88

The Jeep Patriot got its name because it is carwith the most American made parts.

Back 88

False

Front 89

Which of the following is NOT an objective ofthe Food Sovereignty movement?

Back 89

A country’s right to export food to any region without tariffs

Front 90

What destroyed India’sartisan cooking oil industry

Back 90

New sanitation rules by the World Trade Organization

Front 91

Why is the World Trade Organization (WTO) sometimesseen as neo-colonization by developing countries?

Back 91

Because the rules set by the WTO seem similar to laws set by westernconquering governments in the past

Front 92

Why is the World Trade Organization (WTO)sometimes seen as neo-colonization by developing countries?

Back 92

Because the rules set by the WTO meant to encourage trade reduce acountry’s ability to pass their own laws about food

Front 93

Why is there a Food Sovereignty movement innortheastern states like Maine and Vermont?

Back 93

So that small farmers can sell directly to consumers without having toabide by food health laws

Front 94

Why does the U.S. both import and export beef?

Back 94

Because they aren’t really exporting and importing the same type ofbeef

Front 95

What type of beef does the U.S. import, comparedto the beef it exports?

Back 95

Leaner Beef

Front 96

What would happen to the price of wheat if theU.S. no longer traded with other countries?

Back 96

It would fall