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Agricultural Markets and Prices

Description: This quiz covers the various aspects of agricultural markets and prices, including supply and demand, market equilibrium, price determination, and government intervention.
Number of Questions: 15
Created by:
Tags: agricultural economics agricultural markets prices supply and demand market equilibrium government intervention
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What is the primary function of an agricultural market?

  1. To facilitate the exchange of agricultural products between buyers and sellers

  2. To regulate the prices of agricultural products

  3. To provide financial assistance to farmers

  4. To promote agricultural research and development

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Correct Option: A
Explanation:

The primary function of an agricultural market is to provide a platform for buyers and sellers to trade agricultural products, thereby facilitating the distribution of these products to consumers.

What is the law of supply?

  1. As price increases, quantity supplied decreases

  2. As price decreases, quantity supplied increases

  3. Quantity supplied is independent of price

  4. Quantity supplied is directly proportional to price

Show answer
Correct Option:
Explanation:

The law of supply states that, all other factors being equal, as the price of a good or service increases, the quantity supplied of that good or service will also increase.

What is the law of demand?

  1. As price increases, quantity demanded decreases

  2. As price decreases, quantity demanded increases

  3. Quantity demanded is independent of price

  4. Quantity demanded is directly proportional to price

Show answer
Correct Option: A
Explanation:

The law of demand states that, all other factors being equal, as the price of a good or service increases, the quantity demanded of that good or service will decrease.

What is the equilibrium price in an agricultural market?

  1. The price at which quantity supplied equals quantity demanded

  2. The price at which quantity supplied is greater than quantity demanded

  3. The price at which quantity supplied is less than quantity demanded

  4. The price at which there is a surplus of agricultural products

Show answer
Correct Option: A
Explanation:

The equilibrium price in an agricultural market is the price at which the quantity of agricultural products supplied by producers is equal to the quantity of agricultural products demanded by consumers.

What is a market surplus?

  1. The quantity of agricultural products supplied exceeds the quantity demanded

  2. The quantity of agricultural products demanded exceeds the quantity supplied

  3. The equilibrium price is higher than the market price

  4. The equilibrium price is lower than the market price

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Correct Option: A
Explanation:

A market surplus occurs when the quantity of agricultural products supplied by producers exceeds the quantity of agricultural products demanded by consumers.

What is a market shortage?

  1. The quantity of agricultural products supplied exceeds the quantity demanded

  2. The quantity of agricultural products demanded exceeds the quantity supplied

  3. The equilibrium price is higher than the market price

  4. The equilibrium price is lower than the market price

Show answer
Correct Option: B
Explanation:

A market shortage occurs when the quantity of agricultural products demanded by consumers exceeds the quantity of agricultural products supplied by producers.

What is the role of government intervention in agricultural markets?

  1. To stabilize prices

  2. To increase production

  3. To reduce surpluses

  4. All of the above

Show answer
Correct Option: D
Explanation:

Government intervention in agricultural markets can be used to stabilize prices, increase production, reduce surpluses, and achieve other policy objectives.

What is a price support program?

  1. A government program that guarantees a minimum price for agricultural products

  2. A government program that provides financial assistance to farmers

  3. A government program that regulates the production of agricultural products

  4. A government program that promotes the consumption of agricultural products

Show answer
Correct Option: A
Explanation:

A price support program is a government program that guarantees a minimum price for agricultural products, thereby providing farmers with a safety net against low prices.

What is a production quota?

  1. A government-imposed limit on the quantity of agricultural products that can be produced

  2. A government-imposed limit on the price of agricultural products

  3. A government-imposed limit on the quantity of agricultural products that can be imported

  4. A government-imposed limit on the quantity of agricultural products that can be exported

Show answer
Correct Option: A
Explanation:

A production quota is a government-imposed limit on the quantity of agricultural products that can be produced, typically used to control supply and stabilize prices.

What is an import tariff?

  1. A tax imposed on imported agricultural products

  2. A tax imposed on exported agricultural products

  3. A subsidy provided to domestic producers of agricultural products

  4. A subsidy provided to foreign producers of agricultural products

Show answer
Correct Option: A
Explanation:

An import tariff is a tax imposed on imported agricultural products, typically used to protect domestic producers from foreign competition.

What is an export subsidy?

  1. A tax imposed on imported agricultural products

  2. A tax imposed on exported agricultural products

  3. A subsidy provided to domestic producers of agricultural products

  4. A subsidy provided to foreign producers of agricultural products

Show answer
Correct Option: C
Explanation:

An export subsidy is a subsidy provided to domestic producers of agricultural products, typically used to make their products more competitive in foreign markets.

What is the impact of government intervention on agricultural markets?

  1. It can stabilize prices

  2. It can increase production

  3. It can reduce surpluses

  4. All of the above

Show answer
Correct Option: D
Explanation:

Government intervention in agricultural markets can have a variety of impacts, including stabilizing prices, increasing production, reducing surpluses, and achieving other policy objectives.

What are the challenges facing agricultural markets in developing countries?

  1. Low productivity

  2. Poor infrastructure

  3. Lack of access to credit

  4. All of the above

Show answer
Correct Option: D
Explanation:

Agricultural markets in developing countries face a variety of challenges, including low productivity, poor infrastructure, lack of access to credit, and other constraints.

What are some of the opportunities for agricultural markets in developing countries?

  1. Growing demand for food

  2. Increasing urbanization

  3. Rising incomes

  4. All of the above

Show answer
Correct Option: D
Explanation:

Agricultural markets in developing countries have a number of opportunities for growth, including growing demand for food, increasing urbanization, rising incomes, and other factors.

What are some of the key policy issues related to agricultural markets and prices?

  1. Food security

  2. Farm income

  3. Environmental sustainability

  4. All of the above

Show answer
Correct Option: D
Explanation:

Key policy issues related to agricultural markets and prices include food security, farm income, environmental sustainability, and other important considerations.

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