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Unformatted text preview: AGB 312-02
Prof. MacDougall Mid-Term Exam #3
Long Answer Problem This question consists of two parts, be sure to answer both parts. Be precise in your answers;
vagueness will not be rewarded. Part I
You have been hired as a legislative assistant to a U.S. representative from California
who sits on the House Committee on Agriculture. Your ﬁrst job is to draft an outline of
\ W the 2002 Farm Bill. What are the critical elements of this next farm bill? Be sure to
‘“ \‘0 w address the following issues: 0 What have been general problems of farm policy over the past thirty years that
still need to be addressed and how have past farm policies failed to correct them? What have been the speciﬁc problems of the 1996 “Freedom to Farm” Bill?
How will your draﬁ of the 2002 Farm Bill address the problems above? Part II
How might a lettuce grower in Salinas, California (who has had no government support
for his crop) and a long-time wheat grower in Kansas (who was accustomed to
government support until the 1996 Farm Bill) react to your draft Farm Bill? Explain why
they may or may not differ. OM 030900_AGB3 l2_W00__.ExamQuestion__Handout.dOC AGE 312-02
Prof. MacDougall Information and Comments on AGB 312 Mid-Term #1 Average:
75 Grade scale and distribution: Distribution
93-96 A } 5
87-89 . B+
83-86 B 8
73-76 C } 9
J- 2 Some typical problems in the exam: Remember on T/F questions that if any part of the statement is not true, then the whole
statement is false. 7. The value 6 producer surplus includes the value of the inputs used in production.
T The definition of producer surplus talks about the returns above and beyond the costs of production — equivalent to proﬁt. A policy change which does m; satisfy the Compensation Principle can satisfy the
rule for a Pareto improvement. - T
The Comggtsation Principle allows a loss on one party ’5‘ part if the gain of another
party outweighs the loss. If the Compensation Principle is not satisfied, then there is a loss large enough to outweigh any gain h the simple existence of a loss violates
the definition of a Pareto improvement ' The value
T The assumption in the consumer surplus concept is that if one does not participate
in the market, one cannot be made worse off by the market transaction. The
existence of an externalin means that those people not participating in the market
are made worse off or better of}: consumer surplus can take into account the effects of an externality. AGB312_I~’IidTenn_l_W00_Cormnents.doc I 1 ...
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This homework help was uploaded on 02/13/2008 for the course AGB 312 taught by Professor Macdougall during the Winter '99 term at Cal Poly.
- Winter '99