Suzie signed a contract to sell her soybeans locally to a feed dealer. The best term for this transaction is
Answer: forward contracting.
All of the following are said to be inelastic with regard to demand except
All of the following are said to be inelastic with regard to demand except
Answer: beef
A document that shows the exact size, location, ownership and method of ownership of property is called a .
A document that shows the exact size, location, ownership and method of ownership of property is called a .
Answer: Deed
A market where there are a few large firms that control the market is called a(n)
A market where there are a few large firms that control the market is called a(n)
Answer: oligopoly
To the untrained eye, workers at businesses such as the telephone company and the post office may not appear to be moving when actually they are just very slow workers. Slow service is often blamed on the situation of those businesses, where workers have no incentive to do a good job.
To the untrained eye, workers at businesses such as the telephone company and the post office may not appear to be moving when actually they are just very slow workers. Slow service is often blamed on the situation of those businesses, where workers have no incentive to do a good job.
Answer: monopoly market
In the short run, if variable costs cannot be covered
In the short run, if variable costs cannot be covered
Answer: then the product should not be produced.
A budget to determine if holding hogs to a heavier weight would be profitable is termed a(n)
A budget to determine if holding hogs to a heavier weight would be profitable is termed a(n)
Answer: partial
A budget for soybeans would be termed
A budget for soybeans would be termed
Answer: an enterprise budget.
A business is said to be solvent if total
A business is said to be solvent if total
Answer: assets exceed total liabilities
Which of the following statements is correct about the law of supply ?
Which of the following statements is correct about the law of supply ?
Answer: High price = more product supplied.
One example of a current asset is (a) .
One example of a current asset is (a) .
Answer: cash on hand
What is another term used to describe a net worth statement ?
What is another term used to describe a net worth statement ?
Answer: balance sheet
At the beginning of last year, you had an outstanding loan for $90,000. The loan carries an interest rate of 12% annual percentage rate. You make one loan payment at the end of the year for $25,400. What is the outstanding balance at the beginning of this year?
At the beginning of last year, you had an outstanding loan for $90,000. The loan carries an interest rate of 12% annual percentage rate. You make one loan payment at the end of the year for $25,400. What is the outstanding balance at the beginning of this year?
Answer: $75,400
Which items are most readily converted into cash without loss?
Which items are most readily converted into cash without loss?
Answer: Current assets
Larry has hedged his peanut crop. If he makes the predicted yield and his costs do not change he will
Larry has hedged his peanut crop. If he makes the predicted yield and his costs do not change he will
Answer: make almost exactly what he predicted no matter how low or how high the price goes
When a banker asks a person to pledge his land, livestock or similar property to obtain a loan, this property is referred to as
When a banker asks a person to pledge his land, livestock or similar property to obtain a loan, this property is referred to as
Answer: collateral
A nonprofit business organization that is owned and controlled by the members for the mutual benefit of the members is a
A nonprofit business organization that is owned and controlled by the members for the mutual benefit of the members is a
Answer: cooperative.
Vern sued his boss, Wilber Wilt, because he fell through a hole in the storage room floor and broke his leg. The judge found Wilber guilty because the hole had been there for months and two other people had also hurt themselves by falling through the hole. The judge said, "You failed to take ordinary care to protect your worker. In other words, I find you guilty of ."
Vern sued his boss, Wilber Wilt, because he fell through a hole in the storage room floor and broke his leg. The judge found Wilber guilty because the hole had been there for months and two other people had also hurt themselves by falling through the hole. The judge said, "You failed to take ordinary care to protect your worker. In other words, I find you guilty of ."
Answer: negligence
The rate of return on investment for a farm business is found by
The rate of return on investment for a farm business is found by
Answer: dividing return to capital by total asset value
Suppose a producer discovers insects in his cotton crop and decides to use an insecticide to save the crop. A bank will loan him $2000 at 9.75 percent interest until he sells his crop 9 months later. At that time he must repay the loan. How much will he pay in interest if simple interest is computed?
Suppose a producer discovers insects in his cotton crop and decides to use an insecticide to save the crop. A bank will loan him $2000 at 9.75 percent interest until he sells his crop 9 months later. At that time he must repay the loan. How much will he pay in interest if simple interest is computed?
Answer: $146.25
The demand curve shows the relationship between
The demand curve shows the relationship between
Answer: price and the quantity demanded
The income that could have been received if the input had been used in its most profitable alternative use is called
The income that could have been received if the input had been used in its most profitable alternative use is called
Answer: opportunity cost
If the government were to set the price of milk at an artificially high price, what is likely to occur?
If the government were to set the price of milk at an artificially high price, what is likely to occur?
Answer: A surplus
A written statement that the seller of property gives to the buyer that gives up only the seller's right to the property but does not imply the property is free from legal claims by outside parties is called a(n)
A written statement that the seller of property gives to the buyer that gives up only the seller's right to the property but does not imply the property is free from legal claims by outside parties is called a(n)
Answer: quit claim deed
A farmer would like to determine her liquidity. She has the following data: Current assets equal $178,000 and current liabilities equal $60,000. Her current ratio would equal
A farmer would like to determine her liquidity. She has the following data: Current assets equal $178,000 and current liabilities equal $60,000. Her current ratio would equal
Answer: 2.97:1
A decline in value of an asset over its useful life associated with use, age and obsolescence is known as
A decline in value of an asset over its useful life associated with use, age and obsolescence is known as
Answer: depreciation
The difference between the price of a commodity in the nearby future's market and the local cash price is called
The difference between the price of a commodity in the nearby future's market and the local cash price is called
Answer: basis.
Current assets minus current liabilities is
Current assets minus current liabilities is
Answer: working capital
The price of a commodity is basically determined by the
The price of a commodity is basically determined by the
Answer: supply and demand for the product.
The difference between total assets minus total liabilities is
The difference between total assets minus total liabilities is
Answer: net worth.
In theory, how do grain reserves stabilize prices?
In theory, how do grain reserves stabilize prices?
Answer: By releasing supplies in short production years and absorbing supplies in big production years.
The purpose of insurance is to
The purpose of insurance is to
Answer: reduce risk and uncertainty
If the government allowed no immigration to this country and controlled illegal immigration, the effect on agriculture would probably be
If the government allowed no immigration to this country and controlled illegal immigration, the effect on agriculture would probably be
Answer: All of the answers listed
Corn yields 90 bushels per acre and has a production cost of $140 per acre. Current market prices are $2.50 per bushel for corn and $5.20 per bushel for soybeans. Soybeans can be raised at a production cost of $110 per acre. At what breakeven yield per acre would soybeans generate the same net return per acre as corn?
Corn yields 90 bushels per acre and has a production cost of $140 per acre. Current market prices are $2.50 per bushel for corn and $5.20 per bushel for soybeans. Soybeans can be raised at a production cost of $110 per acre. At what breakeven yield per acre would soybeans generate the same net return per acre as corn?
Answer: 37 1/2 bushels
One example of a fixed cost is
One example of a fixed cost is
Answer: depreciation
A statement of projected costs and returns associated with some change in the normal operation of the business is called a(n)
A statement of projected costs and returns associated with some change in the normal operation of the business is called a(n)
Answer: partial budget.
What is another term used to describe a balance sheet?
What is another term used to describe a balance sheet?
Answer: Net worth statement
Long term, or fixed, assets include
Long term, or fixed, assets include
Answer: buildings
A grower asks your assistance in marketing alternatives for his corn crop. He could currently sell the corn for $2.50 per bushel. He believes that in 4 months the price will be $2.60. If he sold the corn now, he could invest the money at 9 percent interest. He is paying 1.5 cents per month per bushel for storage. What should he do?
A grower asks your assistance in marketing alternatives for his corn crop. He could currently sell the corn for $2.50 per bushel. He believes that in 4 months the price will be $2.60. If he sold the corn now, he could invest the money at 9 percent interest. He is paying 1.5 cents per month per bushel for storage. What should he do?
Answer: Sell now
Select the item that is NOT deductible on Federal Income Tax returns
Select the item that is NOT deductible on Federal Income Tax returns
Answer: Principle paid on debt.
Which of the following net capital ratios would indicate the greatest degree of solvency? (Total Assets/Total Liabilities)
Which of the following net capital ratios would indicate the greatest degree of solvency? (Total Assets/Total Liabilities)
Answer: 1.5
In order to manage taxes it is necessary to adopt an accounting method that best suits your situation. The method which reports income and expenses by keeping track of inventory levels is called the
In order to manage taxes it is necessary to adopt an accounting method that best suits your situation. The method which reports income and expenses by keeping track of inventory levels is called the
Answer: accrual method
A measurable point where an increase in the addition of a variable cost item decreases the actual output of an enterprise.
A measurable point where an increase in the addition of a variable cost item decreases the actual output of an enterprise.
Answer: Diminishing returns
Ellen made $18,419 profit on her operation last year. Her capital investment was $204,550. What was her rate of return to capital invested?
Ellen made $18,419 profit on her operation last year. Her capital investment was $204,550. What was her rate of return to capital invested?
Answer: 9%
What type of insurance protects the farmer from lawsuits if they cause personal injury or property damage to another person?
What type of insurance protects the farmer from lawsuits if they cause personal injury or property damage to another person?
Answer: Liability insurance
A document that shows the exact size, location, ownership and method of ownership of property is called a
A document that shows the exact size, location, ownership and method of ownership of property is called a
Answer: Deed
The coordination of activities that are involved with the buying or selling of a product is called
The coordination of activities that are involved with the buying or selling of a product is called
Answer: marketing
A business organization that is structured as a corporation that qualifies for all purposes except taxation is called a(n)
A business organization that is structured as a corporation that qualifies for all purposes except taxation is called a(n)
Answer: S Corporation
Producers can diversify or specialize in producing products. When producers specialize in an enterprise they are, generally,
Producers can diversify or specialize in producing products. When producers specialize in an enterprise they are, generally,
Answer: increasing efficiency in the enterprise.
Liability of a general partner in a partnership is limited to:
Liability of a general partner in a partnership is limited to:
Answer: All debts and obligations of the partnership
If wheat and corn are common substitutes as an input into livestock feed, then an increase in the market price for corn is expected to:
If wheat and corn are common substitutes as an input into livestock feed, then an increase in the market price for corn is expected to:
Answer: Increase the demand for wheat
An advantage of a farm business structured as a corporation is:
An advantage of a farm business structured as a corporation is:
Answer: Avoidance of personal liability
If the strong dollar reduces the demand for U.S. wheat exports, then we can expect the market price for wheat in the United States to:
If the strong dollar reduces the demand for U.S. wheat exports, then we can expect the market price for wheat in the United States to:
Answer: Decrease.
A written agreement by which an owner of property transfers the title to someone to manage and safeguard for the benefit of beneficiaries is a
A written agreement by which an owner of property transfers the title to someone to manage and safeguard for the benefit of beneficiaries is a
Answer: trust
Purchase of a call option on corn means:
Purchase of a call option on corn means:
Answer: The buyer may, but is not required to, buy a corn futures contract at a set price.
Which of the following gives the best measure of financial progress over a period of years?
Which of the following gives the best measure of financial progress over a period of years?
Answer: Net worth statement
If a tractor's use is increased from 350 to 500 acres per year its:
If a tractor's use is increased from 350 to 500 acres per year its:
Answer: Variable cost per acre will decline
The three R's (Risk, Returns, and Repayment) are frequently evaluated to determine a farmer's:
The three R's (Risk, Returns, and Repayment) are frequently evaluated to determine a farmer's:
Answer: Credit worthiness
The science and art of the organization and operation of farms so as to obtain the maximum amount of continuous net income is the definition for ?
The science and art of the organization and operation of farms so as to obtain the maximum amount of continuous net income is the definition for ?
Answer: farm management
An increase in the supply of an agricultural commodity normally results in
An increase in the supply of an agricultural commodity normally results in
Answer: a price decrease.
When the change in price is greater than the relative change in quantity taken, an agricultural commodity is said to be:
When the change in price is greater than the relative change in quantity taken, an agricultural commodity is said to be:
Answer: inelastic
Agricultural producers such as one who produces soybeans are best described as price:
Agricultural producers such as one who produces soybeans are best described as price:
Answer: takers
Samuel made $22,470 profit on his operation last year. His capital investment was $200,550. What was his rate of return to capital invested?
Samuel made $22,470 profit on his operation last year. His capital investment was $200,550. What was his rate of return to capital invested?
Answer: 11.20%
A 62 year old woman wants to pass along her farm and other assets to her children with a minimum amount of taxes. She should:
A 62 year old woman wants to pass along her farm and other assets to her children with a minimum amount of taxes. She should:
Answer: see someone specializing in estate planning
A written agreement by which an owner of property transfers the title to someone to manage and safeguard for the benefit of beneficiaries is a:
A written agreement by which an owner of property transfers the title to someone to manage and safeguard for the benefit of beneficiaries is a:
Answer: trust
The Net Worth Statement is the best measure of:
The Net Worth Statement is the best measure of:
Answer: financial progress over a period of years
Suppose a producer has just enough acreage to justify the tractor he has purchased. Why would he want to do custom work for his neighbor? So that his:
Suppose a producer has just enough acreage to justify the tractor he has purchased. Why would he want to do custom work for his neighbor? So that his:
Answer: average fixed cost per acre will decline.
Which of the following Net Capital Ratios would indicate the best financial position? (Total Assets / Total Liabilities)
Which of the following Net Capital Ratios would indicate the best financial position? (Total Assets / Total Liabilities)
Answer: 1.8
Capital gains is:
Capital gains is:
Answer: the gain or loss from the sale of capital assets.
A financial tool that would be used to compare the feasibility of raising turkeys to 25 pounds vs. 20 pounds is a:
A financial tool that would be used to compare the feasibility of raising turkeys to 25 pounds vs. 20 pounds is a:
Answer: partial budget
A budget is best described as __________ of income and expense.
A budget is best described as __________ of income and expense.
Answer: a prediction
The income that could have been received if the input had been used in its most profitable alternative use is called:
The income that could have been received if the input had been used in its most profitable alternative use is called:
Answer: opportunity cost.
Which of the following statements is true about family farm corporations?
Which of the following statements is true about family farm corporations?
Answer: Personal liability is limited to the investment in the business.
If the revenue from an enterprise will cover variable costs and most of the fixed costs, a rational producer will:
If the revenue from an enterprise will cover variable costs and most of the fixed costs, a rational producer will:
Answer: minimize his losses by producing in the short run
Items which are least marketable and least readily converted into cash without loss are:
Items which are least marketable and least readily converted into cash without loss are:
Answer: fixed or long term assets
A major goal of diversified farming is to:
A major goal of diversified farming is to:
Answer: spread risk among several enterprises.
Cliff is a computer specialist. He does not own, plant, or raise soybeans, but he has just purchased a futures contract for soybeans. He is:
Cliff is a computer specialist. He does not own, plant, or raise soybeans, but he has just purchased a futures contract for soybeans. He is:
Answer: speculating.
Which of these terms is most closely related to a Futures contract?
Which of these terms is most closely related to a Futures contract?
Answer: forward contact
Income taxes are paid to the:
Income taxes are paid to the:
Answer: state and Federal governments.
A budget for producing soybeans would be termed:
A budget for producing soybeans would be termed:
Answer: an enterprise budget.
A business is said to be solvent if total:
A business is said to be solvent if total:
Answer: assets exceed total liabilities.
A study to determine whether or not a business will be profitable is called:
A study to determine whether or not a business will be profitable is called:
Answer: a feasibility study.
An example of a variable cost of producing strawberries is:
An example of a variable cost of producing strawberries is:
Answer: mulch.
Which of the following is NOT depreciated for tax purposes?
Which of the following is NOT depreciated for tax purposes?
Answer: land
Assume you are a speculator in corn futures, and that you somehow got information, before it was widespread knowledge, that the acreage of corn planted in the mid west was down drastically from earlier forecasts. What would be the most profitable use of this information?
Assume you are a speculator in corn futures, and that you somehow got information, before it was widespread knowledge, that the acreage of corn planted in the mid west was down drastically from earlier forecasts. What would be the most profitable use of this information?
Answer: Immediately buy futures contracts of corn at the current price.
The average size of full time farms in the U.S. is ______ in 1945.
The average size of full time farms in the U.S. is ______ in 1945.
Answer: larger than
An electrician you hire for a fee to repair an irrigation pump would best be described as a(n):
An electrician you hire for a fee to repair an irrigation pump would best be described as a(n):
Answer: independent contractor.
Estate taxes are imposed:
Estate taxes are imposed:
Answer: by the Federal government after death
Most farm businesses in the modern world are:
Most farm businesses in the modern world are:
Answer: sole proprietorships
Advertising is designed to:
Advertising is designed to:
Answer: increase demand.
In the long run, as the price of corn increases the supply:
In the long run, as the price of corn increases the supply:
Answer: increases.
A legal entity, which is separate from stockholders, and protects the stockholders from personal liability, best describes a(n):
A legal entity, which is separate from stockholders, and protects the stockholders from personal liability, best describes a(n):
Answer: corporation.
Which of the following would probably see the least change in quantity demanded it the price was increased?
Which of the following would probably see the least change in quantity demanded it the price was increased?
Answer: gasoline
If a person fails to comply with the terms of a contract, it is known as:
If a person fails to comply with the terms of a contract, it is known as:
Answer: a breach of contract.
The time a check is in transit between the bank it was deposited at and the bank it was drawn on is called:
The time a check is in transit between the bank it was deposited at and the bank it was drawn on is called:
Answer: float time
A reduction in the supply of an agricultural commodity, with no change in demand, normally results in:
A reduction in the supply of an agricultural commodity, with no change in demand, normally results in:
Answer: a price increase
Which of the following is true concerning trespassers on your land?
Which of the following is true concerning trespassers on your land?
Answer: You may use reasonable force to remove trespassers.
All your debt obligations to others are ____________.
All your debt obligations to others are ____________.
Answer: liabilities
Hedging does all the following except:
Hedging does all the following except:
Answer: guarantees a profit to the producer.
An advantage of a family farm business structured as a corporation is:
An advantage of a family farm business structured as a corporation is:
Answer: that personal liability may be avoided
Beavis and Butthead thought it would be cool to play on the obsolete equipment Mr. Brown had parked on his property beside the road. Beavis got hurt and his parents decided to sue Mr. Brown. Mr. Brown's attorney said he might be found liable if the jury or judge determined that the old equipment:
Beavis and Butthead thought it would be cool to play on the obsolete equipment Mr. Brown had parked on his property beside the road. Beavis got hurt and his parents decided to sue Mr. Brown. Mr. Brown's attorney said he might be found liable if the jury or judge determined that the old equipment:
Answer: was an "attractive nuisance."
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