EQ # 12 – AGEC 105 – November 11, 2013 (5 points) (1/2pt) 1. The price support program through a loan rate is controlled by which government agency? Commodity Credit Corporation (CCC) 2. Consider the diagram for wheat on the right. (1/2pt) (a) With a loan rate of $.52/pound, farmers will supply _____________ million pounds. (1/2pt) (b) How many bushels of cotton will the government accumulate at the loan rate of $.52/pound? ___________ million pounds P $.52 $.45 125 140 180 Q S D 180 Million pounds 55 (1/2pt) (c) The government program will cost taxpayers $______ million. (1/2pt) (d) Under this government program, how much will producers receive? $______million 28.6 936

(1/2pt) 3. Which of the following describe the real roots of the farm problem? (List ALL that apply) Own-price elasticity of demand for farm products is elastic (b) Lack of market power by agricultural producers Interest sensitivity of the agricultural sector Fixity of farm assets (e) Underproduction of farm products (1/2pt) 4. Which program established in 1985 was designed to reduce acreage in production, reduce erosion, and improve water quality? Conservation Reserve Program (CRP) (1/2pt) 5. Which Farm Bill was termed the “Freedom to Farm” Act? 1996 Farm Bill also known as the “FAIR” Act (1pt) 6. The target price for this commodity is $4.17/bushel and the loan rate is $2.94 bushel. What is the commodity? If the market price is $4/bushel, what is the deficiency payment per bushel? Wheat, Deficiency payment = $0.17/bushel

Random Question Which two countries are the largest producers of coffee? Columbia and Brazil (each country gets a ½ point)