Chapter 28 429 Please read the following: 1. After carefully reading each question, mark your answers in the appropriate spaces in the on-line testing system at www.agu.edu. 2. Submit any inquiries through "Contact Us" on the webpage, or by contacting Student Services at studentservices@agu.edu. MULTIPLE CHOICE: Question 1: Which of the following is not a form of air pollution? (a) Acid rain (b) Smog (c) The greenhouse effect (d) Thermal pollution Question 2: According to the text, which of the following is the prime cause of the greenhouse effect? (a) Sulfur dioxide (b ) Nitrogen oxide (c) Carbon dioxide (d) Carbon monoxide Question 3: Only percent of the U.S. population is served by a system of sewers and adequate water treatment plants. (a) 40 (b) 50 (c) 60 (d) 70 Question 4: Electric power plants account for over percent of all thermal discharges. (a) 80 (b) 60 (c) 40 (d) 20Question 5: According to EPA studies, the United States generates over billion tons of solid waste each year. (a) 50 (b) 100 (c) 5 (d) 25 Question 6: Which of the following is assumed to be the most important motivation for producers? (a) The desire to minimize external costs (b ) The desire to maximize economic profits (c ) The desire to minimize social costs above private costs (d) The desire to maximize social benefits and private revenues at the same time Question 7: All of the following are negative externalities in production except: (a) Secondhand smoke in a restaurant (b ) Acid rain produced by power plants (c) Carbon dioxide emissions from the production of steel d) Thermal pollution into a river from an electric power plant Question 8: Which of the following is a market incentive to discourage pollution? (a) Emission charges and user charges (b) User charges and government regulation (c ) Command-and-control options (d) The greenhouse effect Question 9: Producers can be encouraged to internalize external costs by having the government: (a) Impose emission charges but not pollution fines (b) Reduce user fees (c) Alter market incentives but not through regulatory intervention (d) Impose pollution fines or higher user fees Question 10: A polluting company can be billed in proportion to its pollution through: (a) Higher user fees Emission charges Privatization Tradable pollution permits Question 11: An emission charge: (a) Reduces private marginal cost and reduces output (b ) Reduces private marginal cost and increases output (c) Increases private marginal cost and reduces output (d) Increases private marginal cost and increases outputQuestion 12: A five-cent container deposit on bottles: (a) Increases the price of containers that do not use recycled materials (b) Has no impact on the price of recycled materials (c ) Increases the price of recycled materials and thus discourages recycling (d) Decreases the price of recycled materials and thus encourages recycling Question 13: By implementing user fees, the government tries to shift: (a) Private costs to society Social costs to the producer External costs to users (d) External costs to the producer Question 14: Pollution control efforts: (a) Are free of opportunity costs ( b ) Change what and how much is produced (c) Reduce private marginal costs (d) Increase external costs Question 15: The optimal rate of pollution occurs where: (a) MR = MC for the production of the good that produces pollution ( b) The marginal benefit equals the marginal cost of pollution abatement (c) The marginal benefit of pollution abatement is zero (d) Pollution is reduced to zero Question 16: In the United States, in general, farmers behave like: (a) Monopolists (b ) Oligopolists (c ) Perfect competitors (d) Monopolistic competitors Question 17: Which of the following is true for the agriculture market? (a) The law of demand does not apply (b) Individual farmers face a horizontal demand curve (c ) Individual farmers face a vertical demand curve (d) Farmers have market power Question 18: Farmers cannot individually affect market price because: (a) There is an infinite demand for their goods (b ) Demand is perfectly inelastic for the farmer's produce (c) Their individual production is insignificant relative to the production of the market (d) The government exercises control over the market power of competitive firmsQuestion 19: Which of the following characterizes a typical agricultural market? (a) A horizontal demand curve for the industry (b ) Market power on the part of each farmer (c) A downward-sloping demand curve for the firm (d) Low barriers to entry Question 20: Which of the following is true for a perfectly competitive agricultural market with economic profits? (a) Firms will enter and existing firms will increase their production until economic profits are zero ( b ) The profits will last indefinitely since there are barriers to entry (c ) Firms will exit until normal profits are zero (d) No entry or exit will occur based on economic profits Question 21: The exit of farms from a market should: (a) Shift the agricultural market supply curve to the right (b ) Increase the equilibrium market price Decrease the equilibrium market price Co Increase the equilibrium market output Question 22: If an agricultural price support keeps a price above the equilibrium market price: (a) Shortages of agricultural products will result ( b ) More resources will be devoted to agriculture than are optimal (c ) There will be redistribution of income from the government to consumers (d) There will be positive market feedback leading to even higher prices Question 23: Which of the following would result from a price support program when the support price is set above the equilibrium price, ceteris paribus? (a) Output would decline ( b ) The price paid by consumers would rise (c ) The consumption of the product would rise (d) Quality would deteriorate Question 24: Parity pricing refers to the relative price of farm products to nonfarm products in the period: (a) 1930 (b) 1985-2014 (c) 1910 (d) 1950Question 25: Supply restrictions in the farming industry occur in all of the following forms except: (a) Acreage set-asides (b ) Marketing orders (c) Import quotas (d) Export subsidies Question 26: Supply restrictions in the farming industry occur in the form of: (a) Import quotas ( b ) Government stockpiles (c ) Price supports (d) Production subsidies Question 27: According to the text, which of the following items has the U.S. federal government subsidized for farmers? (a) Transportation ( b ) Migrant workers (c) Marketing (d) Seeds Question 28: The 1996 Farm Act: (a) Called for a phaseout of farm subsidies ( b ) Reduced loan rates (c ) Increased the amount of set-aside acreage (d) Increased government support prices Question 29: The 1996 Farm Act did all of the following except: (a) Eliminate target prices and deficiency payments ( b ) Refocus farm policy toward stabilizing farm incomes rather than prices ( C ) Eliminate many restrictions on acreage set-asides (d) Increase government regulation of farming Question 30: The "Asian crisis" was responsible for all of the following effects on U.S. agriculture beginning in 1998 except: (a) Decreasing farm exports to Asia (b) Decreasing grain prices (c) Decreasing employment in the U.S. farm equipment industry (d) Decreasing regulation of farmers