Farm Management Trivia Quiz: Exam!

1. How many acres are in a section of ground?

100

240

640

1280

None of the above

2. The tax on gasoline is considered a/an:

Business tax

Excise tax

Income tax

None of these

Property tax

3. A firm should shut down in the short-run if it cannot cover its

Time costs

Total costs

Fixed costs

Variable costs

Overhead costs

4. When does seed corn become a fixed cost?

When it is ordered by the farmer

When the farmer has planted it

When the dealer delivers it to the farmer

Only if the farmer defaults on the loan paying for it

When it is on backorder at the COOP

5. 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?

Shifts to the left

Shifts out and to the right

It doesn't change because US pork supplies remain fixed

None of the above

6. The current income tax structure is based on a ________________ income tax rate schedule.

Regressive

Flat

Negative

Progressive

None of these

7. The main drawback of an adjustable rate mortgage is:

The interest rate can increase

The initial interest rate is usually higher than for other types of loans

It is only available for loans less than $10,000

Interest expense is not deductible farm expense

None of these

8. A firm should shut down in the short-run if it cannot cover its

Time costs

Total cost

Fixed costs

Variable costs

Overhead costs

9. If Jack's farm has a working capital value greater than $0, what do we know for certain about its current ratio:

It is equal to one

It is less than one

It is greater than one

It is less than $0

We cannot determine from the information given

10. Price that must be paid for options you like?

Strike price

Short hedge

Premium

Grid

Long hedge

11. If pork and chicken are substitutes and the price of chicken rises, what happens to the demand of pork?

Demand for pork increases

Demand for pork decreases

Price of substitutes don't affect demand shifts

None of the above

12. A firm should shut down in the short-run if its cannot cover its

Fixed costs

Total costs

Variable costs

Time costs

Overhead costs

13. What is interest?

The amount of money borrowed from the lender at the time of the loan origination

The cost of borrowing money

Half the principal

The balance of the loan

14. The deadline for a crop insurance application for corn in Missouri is

March 1

March 15

April 1

April 15

15. Which of the following is a variable cost?

Depreciation

Interest

Fuel

Taxes

Insurance

16. 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?

650.00

78.00

125.00

54.16

17. 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?

Disounting

Budgeting

Amortizing

Compounding

None of these

18. Evans Farms delivered 48,620 lbs. of wheat to MidMO Farmers Elevator. How many bushels did they deliver?

486.2

1519.4

Wheat is not measured in bushels

810.3

868.2

19. The degree which a farms assets adequately secure its debts is referred to as:

Liquidity

Solvency

Efficiency

Profitability

Debt Structure

20. What is the length of time for the term on a machinery loan?

5-year property

7-year property

10-year property

Can be negotiated with the lender

21. Your cow gets out onto a public road and is hit, causing injury to an automobile and its passenger. For protection, you need __________ insurance.

Livestock Insurance

Accident and Health Insurance

Property Insurance

Liability Insurance

None of these

22. 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?

$179,431.20

$204,431.20

$182,480

$195,528.20

None of the above

23. Which of the following is unnecessary information to calculate the time value of money?

Interest rate

Stock market loss/gain

Final investment value

Length of time

24. Another term for net worth is:

Net farm income

None of these

Owner equity

Owner value

Estate tax

25. 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)

$297,000

$886,567

$6,716

$995

26. How many square feet are in an acre?

5,280

None of these

100,000

43,560

12,250

27. How many pounds of 34% protein supplement must be mixed with 9% protein corn to make a ton of 16% protein feed?

640 pounds

560 pounds

360 pounds

None of these

440 pounds

28. To protect against grain lost due to wind damage to a grain storage facility, a farmer would need:

Liability insurance

Crop insurance

Property insurance

Accident insurance

None of the above

29. What is principal?

The total amount of money you pay to the lender

The actual amount of money borrowed from the lender

The present value of the money paid to the lender

The amount of money left over

30. 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?

9.75%

9.25%

8.50%

None of these

10.50%

31. 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.?

160

None of these

640

10

40

32. What is the difference between local cash price and price of the expiring futures contract?

Option

Hedging

Margin Call

Basis

Futures contract

33. The change in total revenue due to a one-unit change in input is best defined as:

Marginal Revenue Product

Marginal Product

Average Product

Total Returns

34. 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?

Buy futures contracts expecting to buy more contracts when the corn is sold

Sell futures contracts expecting to sell more contracts when the corn is sold

Buy Futures contracts expecting to sell those contracts when the corn is sold

Sell futures contracts expecting to buy those contracts back when the corn is sold

35. The financial ratio that would be best to evaluate a farms ability to cover unexpected operational expenses is:

Rate of Return of Assets

Asset Turnover Ratio

Current Ratio

Debt-To-Asset Ration

Liquidity Ration

36. Which economic principle states that at some point in time marginal product decreases with each additional unit of input?

Opportunity Cost

Diminishing Economic Returns

Diminishing Physical Returns

Diminishing Total Returns

37. What is a legally binding agreement made on a future exchange to buy or sell a commodity?

Hedging

Option

Basis

Futures contract

38. What is the difference between local cash price and price of the expiring futures contract?

Futures contact

Basis

Hedging

Margin Call

Option

39. Which one do you like?What is loan amortization?

Paying off debt with a varying repayment schedule

The ability to get a loan from the bank

Paying off debt with a fixed repayment schedule

The ability to repay a loan from the bank

Option 5

40. What is managing price or market risk by taking an opposite position in the futures market from that held in the cash market?

Basis

Option

Hedging

Futures contract

41. The change in total cost or total variable cost due to a one-unit change in input is best defined as:

Marginal Imput

Marginal Revenue Product

Cost Production

Marginal Input Cost

42. The money on deposit to ensure performance of a futures contract is called:

Premium

Commission

Margin

Basis

Hedge

43. 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?

Option

Futures contract

Basis

Hedging

Multi-year

Farm Management Trivia Quiz: Exam!

1. How many acres are in a section of ground?

2.

What first name or nickname would you like us to use?

2. The tax on gasoline is considered a/an:

3. A firm should shut down in the short-run if it cannot cover its

4. When does seed corn become a fixed cost?

5. 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?

6. The current income tax structure is based on a ________________ income tax rate schedule.

7. The main drawback of an adjustable rate mortgage is:

8. A firm should shut down in the short-run if it cannot cover its

9. If Jack's farm has a working capital value greater than $0, what do we know for certain about its current ratio:

10. Price that must be paid for options you like?

11. If pork and chicken are substitutes and the price of chicken rises, what happens to the demand of pork?

12. A firm should shut down in the short-run if its cannot cover its

13. What is interest?

14. The deadline for a crop insurance application for corn in Missouri is

15. Which of the following is a variable cost?

17. 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?

18. Evans Farms delivered 48,620 lbs. of wheat to MidMO Farmers Elevator. How many bushels did they deliver?

19. The degree which a farms assets adequately secure its debts is referred to as:

20. What is the length of time for the term on a machinery loan?

21. Your cow gets out onto a public road and is hit, causing injury to an automobile and its passenger. For protection, you need __________ insurance.

22. 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?

23. Which of the following is unnecessary information to calculate the time value of money?

24. Another term for net worth is:

26. How many square feet are in an acre?

27. How many pounds of 34% protein supplement must be mixed with 9% protein corn to make a ton of 16% protein feed?

28. To protect against grain lost due to wind damage to a grain storage facility, a farmer would need:

29. What is principal?

30. 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?

31. 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.?

32. What is the difference between local cash price and price of the expiring futures contract?

33. The change in total revenue due to a one-unit change in input is best defined as:

34. 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?

35. The financial ratio that would be best to evaluate a farms ability to cover unexpected operational expenses is:

36. Which economic principle states that at some point in time marginal product decreases with each additional unit of input?

37. What is a legally binding agreement made on a future exchange to buy or sell a commodity?

38. What is the difference between local cash price and price of the expiring futures contract?

39. Which one do you like?What is loan amortization?

40. What is managing price or market risk by taking an opposite position in the futures market from that held in the cash market?

41. The change in total cost or total variable cost due to a one-unit change in input is best defined as:

42. The money on deposit to ensure performance of a futures contract is called:

43. 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?