Farm Management Trivia Quiz: Exam!
(189).jpg "Farm Management Trivia Quiz: Exam! - Quiz")
- 1.
If the United States enters a trade agreement with country X and as a result country X charges a low tariff for imported US pork, what happens to country X's demand for US pork?
- A.
Shifts to the left
- B.
Shifts out and to the right
- C.
It doesn't change because US pork supplies remain fixed
- D.
None of the above
Correct Answer
B. Shifts out and to the right -
- 2.
To protect against grain lost due to wind damage to a grain storage facility, a farmer would need:
- A.
Liability insuranceÂ
- B.
Crop insurance
- C.
Property insurance
- D.
Accident insurance
- E.
None of the above
Correct Answer
C. Property insurance -
- 3.
Sue is considering a purchase of a 132-acre farm. She figures the farm will generate a profit $29,700 per year. She can get a fixed rate loan on the farm at 3.35% APR. Using the capitalization approach to value the property, Sue figures she could pay ______________ per acre for the farm. (nearest dollar)
- A.
$297,000
- B.
$886,567
- C.
$6,716
- D.
$995
Correct Answer
C. $6,716 -
- 4.
At the beginning of last year, a farmer had an outstanding loan of $217,480. The interest rate was 6% APR. If the farmer made one loan payment at the end of the year of $35,000, what was the outstanding balance at the end of the year?
- A.
$179,431.20
- B.
$204,431.20
- C.
$182,480
- D.
$195,528.20
- E.
None of the above
Correct Answer
D. $195,528.20 -
- 5.
If John wants to know how much money he will have to live on when he retires, what process will he use to figure out the value of his current investments at retirement?
- A.
Disounting
- B.
Budgeting
- C.
Amortizing
- D.
Compounding
- E.
None of these
Correct Answer
D. Compounding -
- 6.
The financial ratio that would be best to evaluate a farms ability to cover unexpected operational expenses is:
- A.
Rate of Return of Assets
- B.
Asset Turnover Ratio
- C.
Current Ratio
- D.
Debt-To-Asset Ration
- E.
Liquidity Ration
Correct Answer
C. Current Ratio -
- 7.
Price that must be paid for options you like?
- A.
Strike price
- B.
Short hedge
- C.
Premium
- D.
Grid
- E.
Long hedge
Correct Answer
C. Premium -
- 8.
The change in total cost or total variable cost due to a one-unit change in input is best defined as:
- A.
Marginal Imput
- B.
Marginal Revenue Product
- C.
Cost Production
- D.
Marginal Input Cost
Correct Answer
D. Marginal Input Cost -
- 9.
Which economic principle states that at some point in time marginal product decreases with each additional unit of input?
- A.
Opportunity Cost
- B.
Diminishing Economic Returns
- C.
Diminishing Physical Returns
- D.
Diminishing Total Returns
Correct Answer
C. Diminishing Physical Returns -
- 10.
The money on deposit to ensure performance of a futures contract is called:
- A.
Premium
- B.
Commission
- C.
Margin
- D.
Basis
- E.
Hedge
Correct Answer
C. Margin -
- 11.
A firm should shut down in the short-run if it cannot cover its
- A.
Time costs
- B.
Total cost
- C.
Fixed costs
- D.
Variable costs
- E.
Overhead costs
Correct Answer
D. Variable costs -
- 12.
The main drawback of an adjustable rate mortgage is:
- A.
The interest rate can increase
- B.
The initial interest rate is usually higher than for other types of loans
- C.
It is only available for loans less than $10,000
- D.
Interest expense is not deductible farm expense
- E.
None of these
Correct Answer
A. The interest rate can increase -
- 13.
How many acres would be in the parcel of ground with the legal description of NE1/4, SE1/4, S1, T3N, R3E of the 5th P.M.?
- A.
160
- B.
None of these
- C.
640
- D.
10
- E.
40
Correct Answer
E. 40 -
- 14.
On April 1, 2017, Kate borrowed $25,000 to plant corn. On November 1, 2017, she repaid the $25,000 along with $1239.58 interest. What annual interest rate did she pay?
- A.
9.75%
- B.
9.25%
- C.
8.50%
- D.
None of these
- E.
10.50%
Correct Answer
C. 8.50% -
- 15.
How many pounds of 34% protein supplement must be mixed with 9% protein corn to make a ton of 16% protein feed?
- A.
640 pounds
- B.
560 pounds
- C.
360 pounds
- D.
None of these
- E.
440 pounds
Correct Answer
B. 560 pounds -
- 16.
What is managing price or market risk by taking an opposite position in the futures market from that held in the cash market?
- A.
Basis
- B.
Option
- C.
Hedging
- D.
Futures contract
Correct Answer
C. Hedging -
- 17.
Evans Farms delivered 48,620 lbs. of wheat to MidMO Farmers Elevator. How many bushels did they deliver?
- A.
486.2
- B.
1519.4
- C.
Wheat is not measured in bushels
- D.
810.3
- E.
868.2
Correct Answer
D. 810.3 -
- 18.
Which one do you like?What is loan amortization?
- A.
Paying off debt with a varying repayment schedule
- B.
The ability to get a loan from the bank
- C.
Paying off debt with a fixed repayment schedule
- D.
The ability to repay a loan from the bank
- E.
Option 5
Correct Answer
C. Paying off debt with a fixed repayment schedule -
- 19.
What is interest?
- A.
The amount of money borrowed from the lender at the time of the loan origination
- B.
The cost of borrowing money
- C.
Half the principal
- D.
The balance of the loan
Correct Answer
B. The cost of borrowing money -
- 20.
If a producer decides to use the futures market to hedge corn he plans to sell at fall harvest, what would he do in the prior spring?
- A.
Buy futures contracts expecting to buy more contracts when the corn is sold
- B.
Sell futures contracts expecting to sell more contracts when the corn is sold
- C.
Buy Futures contracts expecting to sell those contracts when the corn is sold
- D.
Sell futures contracts expecting to buy those contracts back when the corn is sold
Correct Answer
D. Sell futures contracts expecting to buy those contracts back when the corn is sold -
- 21.
What is principal?
- A.
The total amount of money you pay to the lender
- B.
The actual amount of money borrowed from the lender
- C.
The present value of the money paid to the lender
- D.
The amount of money left over
Correct Answer
B. The actual amount of money borrowed from the lender -
- 22.
What is the length of time for the term on a machinery loan?
- A.
5-year property
- B.
7-year property
- C.
10-year property
- D.
Can be negotiated with the lender
Correct Answer
D. Can be negotiated with the lender -
- 23.
The tax on gasoline is considered a/an:
- A.
Business tax
- B.
Excise tax
- C.
Income tax
- D.
None of these
- E.
Property tax
Correct Answer
B. Excise tax -
- 24.
What is a legally binding agreement made on a future exchange to buy or sell a commodity?
- A.
Hedging
- B.
Option
- C.
Basis
- D.
Futures contract
Correct Answer
D. Futures contract -
- 25.
Which of the following is unnecessary information to calculate the time value of money?
- A.
Interest rate
- B.
Stock market loss/gain
- C.
Final investment value
- D.
Length of time
Correct Answer
B. Stock market loss/gain -
- 26.
A firm should shut down in the short-run if it cannot cover its
- A.
Time costs
- B.
Total costs
- C.
Fixed costs
- D.
Variable costs
- E.
Overhead costs
Correct Answer
D. Variable costs -
- 27.
When does seed corn become a fixed cost?
- A.
When it is ordered by the farmer
- B.
When the farmer has planted it
- C.
When the dealer delivers it to the farmer
- D.
Only if the farmer defaults on the loan paying for it
- E.
When it is on backorder at the COOP
Correct Answer
B. When the farmer has planted it -
- 28.
What is the difference between local cash price and price of the expiring futures contract?
- A.
Option
- B.
Hedging
- C.
Margin Call
- D.
Basis
- E.
Futures contract
Correct Answer
D. Basis -
- 29.
Show Me Farms needs to decide the most profitable weight to market a group of steers they are currently finishing. They estimate it will take an additional 650 lb. of feed/ steer to increase the sales weight by 100 lb /steer. The current feed cost is 12.00 / cwt. The expected sales price for the finished steers is $125.00 / cwt. What is the Marginal Input Cost/head for this scenario?
- A.
650.00
- B.
78.00
- C.
125.00
- D.
54.16
Correct Answer
B. 78.00 -
- 30.
If Jack’s farm has a working capital value greater than $0, what do we know for certain about its current ratio:
- A.
It is equal to one
- B.
It is less than one
- C.
It is greater than one
- D.
It is less than $0
- E.
We cannot determine from the information given
Correct Answer
C. It is greater than one -
- 31.
Your cow gets out onto a public road and is hit, causing injury to an automobile and its passenger. For protection, you need __________ insurance.
- A.
Livestock Insurance
- B.
Accident and Health Insurance
- C.
Property Insurance
- D.
Liability Insurance
- E.
None of these
Correct Answer
D. Liability Insurance -
- 32.
Another term for net worth is:
- A.
Net farm income
- B.
None of these
- C.
Owner equity
- D.
Owner value
- E.
Estate tax
Correct Answer
C. Owner equity -
- 33.
How many square feet are in an acre?
- A.
5,280
- B.
None of these
- C.
100,000
- D.
43,560
- E.
12,250
Correct Answer
D. 43,560 -
- 34.
The change in total revenue due to a one-unit change in input is best defined as:
- A.
Marginal Revenue Product
- B.
Marginal Product
- C.
Average Product
- D.
Total Returns
Correct Answer
A. Marginal Revenue Product -
- 35.
What is the difference between local cash price and price of the expiring futures contract?
- A.
Futures contact
- B.
Basis
- C.
Hedging
- D.
Margin Call
- E.
Option
Correct Answer
B. Basis -
- 36.
The degree which a farms assets adequately secure its debts is referred to as:
- A.
Liquidity
- B.
Solvency
- C.
Efficiency
- D.
Profitability
- E.
Debt Structure
Correct Answer
B. Solvency -
- 37.
If pork and chicken are substitutes and the price of chicken rises, what happens to the demand of pork?
- A.
Demand for pork increases
- B.
Demand for pork decreases
- C.
Price of substitutes don't affect demand shifts
- D.
None of the above
Correct Answer
A. Demand for pork increases -
- 38.
The current income tax structure is based on a ________________ income tax rate schedule.
- A.
Regressive
- B.
Flat
- C.
Negative
- D.
Progressive
- E.
None of these
Correct Answer
D. Progressive -
- 39.
How many acres are in a section of ground?
- A.
100
- B.
240
- C.
640
- D.
1280
- E.
None of the above
Correct Answer
C. 640 -
- 40.
A contract that gives its owner the right but not the obligation to buy or sell a futures contract at a certain price for a certain period of time?
- A.
Option
- B.
Futures contract
- C.
Basis
- D.
Hedging
- E.
Multi-year
Correct Answer
A. Option -
- 41.
A firm should shut down in the short-run if its cannot cover its
- A.
Fixed costs
- B.
Total costs
- C.
Variable costs
- D.
Time costs
- E.
Overhead costs
Correct Answer
C. Variable costs -
- 42.
The deadline for a crop insurance application for corn in Missouri is
- A.
March 1
- B.
March 15
- C.
April 1
- D.
April 15
Correct Answer
B. March 15 -
- 43.
Which of the following is a variable cost?
- A.
Depreciation
- B.
Interest
- C.
Fuel
- D.
Taxes
- E.
Insurance
Correct Answer
C. Fuel -
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Mar 21, 2022Quiz Edited by
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Sep 27, 2019Quiz Created by
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