Scientific Officer-Agri-Economics-Practice-2

Practice questions

1. In agricultural economics, opportunity cost is defined as:
   • Total expenditure recorded in farm accounts
   • Fixed expenditure on agricultural land
   • Value of the next-best alternative forgone
   • Additional cost of producing one unit
2. The law of diminishing marginal returns generally operates when:
   • All factors of production are variable
   • At least one factor is fixed and additional units of a variable factor are employed
   • Technology changes continuously
   • All production factors are increased proportionately
3. If the price elasticity of demand is greater than one in absolute value, demand is:
   • Perfectly inelastic
   • Relatively inelastic
   • Unitary elastic
   • Relatively elastic
4. A production function expresses the relationship between:
   • Market price and consumer income
   • Quantities of inputs and the maximum output obtainable
   • Total revenue and marketing expenditure
   • Demand and market equilibrium
5. In a standard Cobb-Douglas production function with positive input exponents, the elasticity of substitution between inputs is:
   • Zero
   • One
   • Infinite
   • Always greater than two
6. Total revenue in agricultural marketing is calculated by:
   • Total cost multiplied by output
   • Selling price multiplied by quantity sold
   • Fixed cost divided by output
   • Profit multiplied by production cost
7. An isoquant represents combinations of two inputs that:
   • Have identical market prices
   • Generate identical total revenue
   • Produce the same level of output
   • Have identical opportunity costs
8. MRTS in production economics stands for:
   • Marginal Rate of Technical Substitution
   • Maximum Rate of Total Supply
   • Marginal Return to Total Sales
   • Minimum Ratio of Technical Supply
9. If marginal cost is below average cost, average cost will generally:
   • Increase
   • Remain unchanged
   • Decrease
   • Become zero
10. Under standard break-even analysis, the break-even output occurs when:
    • Total revenue exceeds total cost
    • Total revenue equals total cost
    • Marginal revenue equals zero
    • Fixed cost equals variable cost
11. Farm management primarily concerns:
    • International currency exchange
    • Efficient allocation and use of farm resources
    • National banking regulation
    • Industrial export taxation
12. Under the ordinary law of demand, with other factors remaining constant, the demand curve generally slopes:
    • Upward from left to right
    • Vertically in all cases
    • Downward from left to right
    • Horizontally in all cases
13. In the short run, total fixed cost remains unchanged when:
    • Output changes
    • Variable input prices change
    • Production volume increases
    • The number of units produced decreases
14. Average physical product of an input is calculated as:
    • Total product divided by quantity of input employed
    • Marginal product multiplied by total input
    • Total product minus marginal product
    • Total input divided by marginal product
15. For an interior profit-maximizing output choice, a competitive firm generally produces where:
    • Marginal revenue equals marginal cost and marginal cost is rising through the intersection
    • Average cost equals average fixed cost
    • Total revenue equals fixed cost
    • Marginal product equals average revenue
16. A binding price floor established above the market equilibrium price generally creates:
    • Excess demand
    • Excess supply
    • Automatic market equilibrium
    • A complete elimination of production costs
17. Under standard consumer theory, an ordinary indifference curve is generally:
    • Upward sloping
    • Downward sloping
    • Vertical in every case
    • Horizontal in every case
18. Which budgeting technique evaluates the financial effects of a proposed change in one farm enterprise?
    • Whole-farm budgeting
    • Partial budgeting
    • National income budgeting
    • Balance-of-payments budgeting
19. A Giffen good is an exceptional type of inferior good for which:
    • Demand increases when its own price increases, under the relevant conditions
    • Demand always decreases when consumer income increases
    • Supply becomes perfectly elastic
    • Demand remains constant at every price
20. In economics, a sunk cost is an expenditure that:
    • Can always be recovered through resale
    • Changes directly with every additional unit of output
    • Has already been incurred and cannot be recovered
    • Is necessarily equal to marginal cost