Chapter 27
Agriculture, the Environment, and
Transportation
GENERAL QUESTIONS
1. After 1960, all of the following declined except
a. the number of U.S. farms.
b. the portion of U.S. labor force employed by the agricultural sector.
c. the total amount of U.S. land devoted to farming.
d. the average acreage per U.S. farm.
2. By 1994, the percentage of the U.S. labor force employed in agriculture was
a. less than 3 percent.
b. between 5 and 7 percent.
c. about 10 percent.
d. 15 percent.
3. All of the following changes characterize the postwar agricultural sector
except
a. the rise of corporate farms.
b. increasing reliance on expensive, large-scale machinery.
c. innovations by federal and state laboratories that increased output.
d. increasing numbers of tenant farms in the South.
4. Which of the following federal farm programs was successful in reducing
agricultural surpluses?
a. The Agricultural Act of 1948
b. The Emergency Act of 1978
c. The Emergency Feed Grain Bill of 1961
d. The Soil Bank Act of 1956
5. Under the deficiency payments system, which was used to subsidize grain
production,
a. the government purchased all surplus grain and destroyed it.
b. deficiency payments were increased when farmers cultivated their land
more intensively.
c. farmers were required to reduce cultivated acreage by 10 percent.
d. farmers had a greater incentive to engage in beneficial crop rotation.
6. In early 1996, Congress passed the “Freedom to Farm Bill.” Following the
bill’s enactment,
a. farmers found that competition from international agriculture declined.
b. farm prices rose steadily for the next four years.
c. agriculture was completely deregulated, and farmers began to operate
without any government subsidies or assistance.
d. farm prices fell, leading Congress to authorize emergency payments to
farmers in 1998 and 1999.
ANSWER: d. farm prices fell, leading Congress to authorize emergency
payments to farmers in 1998 and 1999.
7. New Deal environmental policies included all of the following except
a. withdrawal of much of the public domain from private entry.
b. the use of the “soil bank” to encourage agricultural conservation.
c. projects such as the TVA that simultaneously protected many resources in
a region.
d. the establishment of Yellowstone as a national park.
8. Market-oriented economists favor the use of _____________ to solve the
global warming problem.
a. explicit emission targets
b. taxes on emissions
c. tradeable rights
d. both (a) and (b)
e. both (b) and (c)
9. Highway and road building
a. has received strong and continuous government support, with substantial
federal funds allocated as early as 1900.
b. received the record levels of federal funding during World War II.
c. in urban areas must be financed solely by state and municipal sources.
d. enjoyed dramatic increases in government funding during the Great
Depression.
10. Deregulation of the trucking industry following the Motor Carrier Act of 1980
has resulted in all of the following except
a. lower shipping costs.
b. decreased service to small towns.
c. declining wages for both union and nonunion workers relative to other
industries.
d. improved quality of shipping services.
11. Powers exercised by the Civil Aeronautics Board included all of the following
except
a. issuing of permits for international carriers.
b. setting of maximum and minimum fares.
c. setting and enforcing rules for airline safety.
d. encouraging the rapid sale or closure of unprofitable carriers.
12. Deregulation of the airline industry following the U.S. Airline Deregulation
Act of 1978 has resulted in all of the following except
a. lower fares for air travel.
b. the adoption of the “hub-and-spoke” system.
c. decreases in flight delays.
d. more crowded planes.
13. The period between 1920 and 1960 marked an era of general economic decline
for the railroad industry. However, one major achievement within this era
was
a. the industry’s successful handling of increased traffic volume during
WWII.
b. the successful consolidation of strong and weak lines.
c. the realization of increasing profits from hauling coal.
d. refurbishing of passenger cars, resulting in increased demand for rail
travel.
14. A major reason for the catastrophic decrease in demand experienced by
railroads after 1920 is
a. the introduction of air travel.
b. the country’s increased reliance on electrical power.
c. deregulation of the industry.
d. increased foreign ownership of railroad infrastructure.
15. The Transportation Act of 1940 gave jurisdiction over all water carriers
engaged in interstate commerce to the
a. Maritime Commission.
b. Department of Defense.
c. U.S. Coast Guard.
d. Interstate Commerce Commission.
16. Beginning in the mid-1960s, the American shipping industry began to show
signs of recovery, largely due to
a. the reinstatement of large government subsidies for shipbuilding firms.
b. increased federal tariffs on goods transported on foreign vessels.
c. the development of the container ship.
d. the development of the aircraft carrier.
ECONOMIC INSIGHTS
1. A comparison of a traditional price support program and the Brannan plan
shows that
a. consumers would clearly prefer the traditional program.
b. farmers would clearly prefer the Brannan plan.
c. losses due to inefficiency are completely avoided under the Brannan plan.
d. the more elastic the supply and demand curves, the lower the relative cost
of the Brannan plan will be.
e. all of the above
ECONOMIC ANALYSIS
1. The income elasticity of demand for agricultural products is typically
a. less than zero.
b. greater than zero, but less than one.
c. greater than one.
d. infinity.
2. If the government-imposed price of corn is greater than the market price, then
the
a. quantity of corn supplied will exceed the quantity of corn demanded.
b. quantity of corn supplied will be less than the quantity of corn demanded.
c. demand curve for corn will increase.
d. supply curve for corn will increase.
3. The existence of external costs means that the
a. producer’s marginal cost is greater than the marginal social cost of
production.
b. producer’s marginal cost is less than the marginal social cost of
production.
c. consumer’s marginal benefit is greater than the marginal social benefit of
the good.
d. consumer’s marginal benefit is less than the marginal social benefit of the
good.
4. Federal support for road building into publicly owned commercial forests has
caused
a. an increase in the supply of timber.
b. an increase in the demand for timber.
c. higher timber prices.
d. a shortage of timber.
e. all of the above.
5. Comparisons between industrialized nations and less-developed countries
indicates that as income rises, the demand for a clean and well-preserved
environment
a. increases by a proportional amount.
b. decreases by a proportional amount.
c. increases by a more than proportional amount.
d. decreases by a less than proportional amount.
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