What creates the optimal consumption point?

budget line and indifference curve

What curve(s) create the optimal consumption point?

Indifference curve and budget line

What does marginal cost measure

The change in the cost by adding another unit of input

As income rises, the percentage spent on food decreases.

Which of the following is true about the relationship between price and quantity supplied?

There is usually a direct relationship

The finite quantity of resources available to meet society's needs.

What is Macroeconomics?

Study of large groups of aggregate decisions

What does stage two in production function graph determine

The amount of variable input to use

If you have an own price elasticity of 0.3, what happens to total revenue when price increases?

Increases revenue decreases quantity demand

What is Microeconomics?

Study of small groups or individual decisions

What is an Engel's Curve

Between income and quantity of 1 good

What is the Price consumption curve

Relationship between goods when the price of 1 good changes

What is Total Physical Product (TPP)

Relationship between 1 input & output holding all else constant

What is normative Economics?

Focuses on what should be or what ought to be questions (Opinion)

What is Positive Economics?

Deals with what is and what would happen questions. (Factual)

What is a demand curve?

A flat-horizontal curve indicating a price quantity relationship for 1 good

What is Average Physical Product (APP)

Amount of output per quantity of input

What curve(s) create the stages of production

physical product curves (TPP, MPP, APP)

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Ag Business Exam 2

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Questions 70

Answers

1
Increase in production of one enterprise causes a reduction of another enterprise's production?
Competitive
Complimentary
Supplementary
Independent
2
Which is NOT a demand shifter
Input Cost
Expectation
Population
Income
3
What curve(s) create the optimal point of 2 inputs?
ppf and isorevenue
Indifference curve and budget line
cost curves
Isoquant and isocost
4
Ceterus Parabus: Holding all else____
Stable
random
Constant
Irregular
5
TPP is maxed out when MPP hits zero
False
True
6
What is Unitary?
Total revenue increases when price decreases
Total revenue will increase when price increases
Total revenue doesn't change when price changes
Sensitivity of quantity (consumption) of good A when income changes
7
What Curve(s) create the supply curve?
indifference curve and budget line
None of these
cost curves
Physical product curves
8
What is Inelastic?
quantity (consunption) of good A when price of good A changes
Total revenue doesn't change when price changes (=1)
Total revenue increases when price decreases (Greater than 1)
Total revenue will increase when price increases (Less than 1)
9
Breakeven (BE) is min ATC
False
True
10
What creates the optimal consumption point?
indifference curve
price consumption curve (PCC)
budget line and indifference curve
Budget line
11
What curve(s) create the optimal consumption point?
price consumption curve (PCC)
cost curves
Indifference curve and budget line
none of the above
12
What does marginal cost measure
The change in the cost by adding another unit of input
The change in cost by producing another unit of output
The change in cost from one enterprise to another
The output cost from production at the level of inputs
13
If income increases and quantity consumed of pork increases, pork is what kind of good?
inferior
elastic
Normal
inelastic
14
What is Engel's Law?
As income rises, the percentage spent on food decreases.
When a consumer cannot exceed his or her income
Price quantity relationship for one good
which a rise(fall) in income will lead to increased (decreased) consumption
15
Which of the following is true about the relationship between price and quantity supplied?
There is always a direct relationship
There is usually a direct relationship
There is usually an inverse relationship
There is always an inverse relationship
16
Which is a demand shifter?
technology
own price
price of related good
number of options
17
What is Scarcity
Measure sensitivity to changes in Own price
The finite quantity of resources available to meet society's needs.
Rights or resource ownership and usage.
focusing on a specific field
18
What is Macroeconomics?
Deals with what is and what would happen questions. (Factual)
Focuses on what should be or what ought to be questions. (Opinion)
Study of large groups of aggregate decisions
Study of small groups or individual decisions
19
The Market Demand Is a Horizontal summation of all individual demand curves
True
False
20
What does stage two in production function graph determine
The lowest point of increasing marginal returns
The beginning point of increasing returns
The amount of variable input to use
The stage where you should not produce
21
On the graph where MC=MR, what does this tell the producer?
Where the losses will be the least
all of the above
Where changes in cost and change in revenue are the same
Where the profits are the greatest
22
If you have an own price elasticity of 0.3, what happens to total revenue when price increases?
Increases revenue decreases quantity demand
Decreases revenue
Increases revenue increases quantity demand
Decrease revenue decrease quantity demand
23
Which is NOT a rule for perfect competition
Large numbers of buyers and sellers
Homogenous Product
Perfect Information
Taste and Preferences
24
What is Microeconomics?
Deals with what is and what would happen questions. (Factual)
Study of small groups or individual decisions
Focuses on what should be or what ought to be questions. (Opinion)
Study of large groups of aggregate decisions
25
What curve(s) create the optimal point of 2 outputs?
ppf and isorevenue
cost curves
isoquant and isocost
Indifference curve and budget line
26
In the Law of Diminishing Marginal Utility, consumption decreases as marginal utility decreases
False
True
27
The relationship between quantity supplied and price
Supply Curve
Direct Marketing
Derived Demand
Demand Curve
28
If you are finding the optimal amount of produce of corn, what curves would you use?
Budget line, indifference curve
PPF, isorevenue
revenue and cost curves
isoquant, isocost
29
What is an Engel's Curve
None of the above
Price quantity relationship for one good
Horizontal summation of all individual demand curves
Between income and quantity of 1 good
30
Which of the following is a supply shifter
population
income
input costs
all of the above
31
What is the Price consumption curve
Relationship between goods when the price of 1 good changes
Price quantity relationship for one good
Between income and quantity of 1 good
Horizontal summation of all individuals curves
32
Demand is the price-quantity relationship for one good
True
False
33
What is Total Physical Product (TPP)
As input levels increase, increases in output slow down
Relationship between 1 input & output holding all else constant
Amount of output per quantity of input
Combination of inputs to reach a certain level of outputs
34
Shutdown (SD) is min AVC
False
True
35
What is Stage ll of the Production Function
The lowest point
The highest point
The point of diminishing returns
The decision making stage
36
A mixed economic system is composed of socialism AND capitalism
False
True
37
What is normative Economics?
Study of small groups or individual decisions
Focuses on what should be or what ought to be questions (Opinion)
Deals with what is and what would happen questions. (Factual)
Study of large groups of aggregate decisions
38
What is Positive Economics?
Focuses on what should be or what ought to be questions. (Opinion)
Study of small groups or individual decisions
Deals with what is and what would happen questions. (Factual)
Study of large groups of aggregate decision
39
If you are finding the optimal amount of 2 outputs to produce, what curves would you use?
PPF, isorevenue
Budget line, indifference curve
isoquant, isocost
revenue and cost curves
40
Economics is the social science dealing with the allocation of scarce resources
True
False
41
As the demand curve shifts to the left it increases
False
True
42
What is a demand curve?
Between income and quantity of 1 good
A flat-horizontal curve indicating a price quantity relationship for 1 good
Price quantity relationship for one good
Relationship between goods when the price of 1 good changes
43
What is Average Physical Product (APP)
Change in output as the input changes
Relationship between 1 input & output holding all else constant
As input levels increase, increases in output slow down
Amount of output per quantity of input
44
Seed, feed, and livestock/poultry purchased is the highest relative category of input expenditures.
False
True
45
The primary purpose of the production function is to determine____.
How to allocate resources throughout a business
All of the above
How much to produce
Whether or not to operate in the long run
46
The point where marginal cost equals marginal revenue is?
Profits will be the greatest
Costs are minimized
Losses will be the greatest
Production is maximized
47
What curve(s) create the stages of production
physical product curves (TPP, MPP, APP)
indifference curve and budget line
cost curves
none of the above
48
The budget line indicates the options of goods based on your income?
True
False
49
If you have an income elasticity of 0.3, what kind of good do you have?
Normal Necessity
Compliment
Subsititute
None of these
50
If the price of candy increases and you drink less coke, what relationship is this?
complement
substitute
normal
inferior
51
As the demand curve shifts to the right, it Increases
True
False
52
What is Elastic?
Total revenue increases when price decreases (greater than 1)
Total revenue doesn't change when price changes (=1)
Total revenue will increase when price increases (Less than 1)
Sensitivity of quantity (consumption) of good A when income changes
53
What is Marginal Utility
An expression that allows us to rank a consumption bundle by total utility
cant think of another answer
Change in utility or satisfaction due to that good's consumption change.
Relationship between goods when the price of 1 good changes.
54
Inferior goods: goods for which a rise (fall) in income will lead to decreased (increased) consumption.
False
True
55
What is the law of supply
The higher the price, the higher the quantity supplied
The higher the quantity demaned, the higher the price
The lower the demand, the higher the price will be
ALL of the above
56
To find the range of production options for feed to use to produce the cattle, you would use the TPP, MPP, APP curves
True
False
57
What happens when income increases
Budget line stays the same
Budget line moves inward
budget line moves outward
Budget line does the hokey pokey
58
What is the indifference curve
Price quantity relationship for one good
all combinations of two goods that yield an equal level of satisfaction
Between income and quantity of one good
A flat-horizontal curve indicating a price quantity relationship for 1 good
59
The Price Consumption Curve establishes the demand curve
False
True
60
The U.S economy represents what kind of economic system?
Socialistic
Mixed
Communistic
Capitalistic
61
The rule of profit maximization says that firms should produce at the point where ___.
Price equals totals cost
Total revenues equals total cost
Marginal revenue equals marginal cost
Price equals average cost
62
Which is NOT a supply shifter
Expectations
Easy Entry and Exit
Number of suppliers
Input cost
63
What is Agricultural Economics
Focuses on what should be or what ought to be questions. (Opinion)
Study of large groups of aggregate decisions
The allocation of scarce resources in the food and fiber industry.
dealing with the allocation of scarce resources for all goods and services
64
What is total utility
Change in utility or satisfaction due to that good's consumption change.
idk bru
the total utility derived from each of the individual commodities.
An expression that allows us to rank a consumption bundle by total utility
65
The indifference curve indicates the options of goods based on preferences
False
True
66
Costs that do not change with output are called___ costs.
Marginal
Fixed
Average
Variable
67
An agriculture producer learns what from the production function?
Whether or not to operate in the long run
Output responses to an input
How to allocate resources throughout an enterprise
All of the above
68
Normal Goods are goods in which a rise (fall) in income will lead to increased (decreased consumption.
True
False
69
What curve(s) create the demand curve
none of the above
cost curves
Price consumption curve (PCC)
physical product curves
70
The market demand curve is the horizontal summation of the two individual demand curve
True
False

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