test2-sample-2010 - Exam II Example Name Part I True or...

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1 Exam II Example Name _______________________ ______________________________________________________________________________ Part I. True or False. Circle T for True or F for False. 10 pts. 2 pts each T F 1) Break-even yield is the same thing as the cost-of-production. T F 2) If two enterprises are competitive, the output of one must increase if the output of the other increases. T F 3) Enterprise budgets cover the revenues and expenses of producing one specific unit of crop or livestock. T F 4) In linear programming, all the constraints and the objective function are linear. T F 5) If returns above variable costs are negative for a producer's enterprise budget for a commodity, that product would generally not be produced on that farm. _________________________________________________________________
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2 Short problems. 1) 6 points. Assume you have a linear programming solution to a farm plan. On the pasture constraint, you have a dual value (shadow price) of $30.00 per acre. On your corn activity you have a dual value (reduced cost) of $20.00. Answer the following questions. a) If additional pasture can be rented for $40 per acre, would you rent any? Why or why not? b) Is corn currently in the solution? c) Interpret the dual (reduced cost) on the corn activity.
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3 Short Definitions. 2. pts. each. 16 pts. total. Whole-farm Budget Break-even Yield Gross Margin Production Possibilities Curve Supplementary Enterprises Complementary Enterprises Linear Programming Whole Farm Plan
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4 Short Problem I. 15 pts. Use the following enterprise budget information to answer the questions. Also, fill in any blanks in the budget. Wheat, 1 Acre, Some County ___________________________________________________________________ Gross Receipts Wheat Sales 50 bu./acre @ $3.60 bushel ____________ Variable Costs Fertilizer 45.00 Chemicals 25.00 Other Pre-harvest 35.00 Interest (10% for 6 months on above) ______ Harvest Expenses 25.00
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