FINAL~2006

FINAL~2006 - University of California, Davis Department of...

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University of California, Davis Department of Agricultural and Resource Economics ARE 120 Spring 2006 Julian Alston FINAL EXAMINATION June 15, 2006 Name:_________________________________________ Student Identification Number:__________________________ Section Points Score I 40 II 40 III 50 IV 65 V 15 V 40 Total 250
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1 Section I. Multiple Choice Section (40 points). For each question circle the letter for only one answer. If you think more than one answer might be correct, choose the best one. Each correct answer is worth 4 points. 1. Professor Sumner suggested that the 2007 Farm Bill is likely to involve reductions in current forms of support for traditional farm program crops a. to reduce budget costs given the U.S. budget deficit b. to comply with WTO limits on the Aggregate Measure of Support c. to redirect resources towards environmental programs d. to redirect resources towards other commodities, such as specialty crops e. all of the above f. none of the above 2. The Farm Security and Rural Investment Act of 2002 a. introduced the conservation security program to encourage farm stewardship b. replaced ad hoc payments with counter-cyclical payments c. allowed farmers to update their program base and yield d. all of the above are true 3. Holding constant both the target price and the price and quantity that would result with no policy, the deadweight cost of a target price with deficiency payments, a. decreases if we increase the elasticity of demand at the no-policy equilibrium b. decreases if we increase the elasticity of supply at the no-policy equilibrium c. increases if we increase the elasticity of either supply or demand d. is unaffected by supply or demand elasticities 4. An import tariff, t per unit, applied by a small-country importer, is equivalent to a. an output subsidy of t per unit b. an export subsidy of t per unit c. an output subsidy of t per unit and a consumption subsidy of t per unit d. an output subsidy of t per unit and a consumption tax of t per unit e. none of the above 5. For a small-country importer, which produces a quantity Q 0 domestically under free trade, the most efficient way to support domestic producers is a. a production quota, Q 0 b. a production quota, Q 0 , combined with an import embargo c. a production quota, Q 0 , combined with an import tariff d. a production quota, Q 0 , combined with an output subsidy
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2 Section I. (continued). 6. Which of the following statements is true? a. A transferable output quota must be more efficient than a non-transferable input quota that has the same effect on output b. A transferable output quota must be more efficient than a transferable input quota that has the same effect on output c. A transferable output quota can be less efficient than a transferable input quota d. All of the above e. None of the above 7. The United States exports soybeans to Europe and imports wine from Europe, in spite of barriers to imports in both countries. Hence, (between the U.S. and EU) a. Europe has a comparative advantage in wine
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This note was uploaded on 05/03/2008 for the course ARE 120 taught by Professor Alston during the Spring '08 term at UC Davis.

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FINAL~2006 - University of California, Davis Department of...

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