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| A lag in prices is often used in supply equation estimation because it often takes time for production to respond to an increase in prices. T/F |
True |
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jenmn2010 Wed, 25 Nov 2009 04:35:14 GMT |
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| A time tren variable is often included in estimation because it is used to represent technical change over time. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 04:35:14 GMT |
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| A longer time series of data (more observations) will always be better than fewer observations. T/F |
False |
0 |
jenmn2010 Wed, 25 Nov 2009 04:31:45 GMT |
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| A lagged dependent variable usually improves estimation because it provides a representation of all the omitted variables for the dependent variable. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 04:31:45 GMT |
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| a quadratic function is useful when the price an quantity are non-linear. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 04:31:45 GMT |
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| a supply flexibility is defined as -1/Es. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 04:31:45 GMT |
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| A supply curve may have a negative (price inc causes quantity dec) in the very short run in commodities such as cattle. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 04:29:06 GMT |
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| The value of R2 can be positive or negative. T/F |
False |
0 |
jenmn2010 Wed, 25 Nov 2009 04:29:06 GMT |
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| a change in the number of producers raising hogs will shift the supply curve for hog production. T/F |
True |
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jenmn2010 Wed, 25 Nov 2009 04:29:06 GMT |
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| to estimate a supply curve you use the method of minimizing the errors of the equation. T/F |
False |
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jenmn2010 Wed, 25 Nov 2009 04:29:06 GMT |
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| suppose the elasticity of supply is .25. what is the flexibility of supply ? |
-4 |
0 |
jenmn2010 Wed, 25 Nov 2009 04:27:07 GMT |
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| which type of equation has an elasticity represented by 2b*p^2/Q? |
quadratic |
0 |
jenmn2010 Wed, 25 Nov 2009 04:27:06 GMT |
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what type of variable would acreage planted represent in a supply equation?
a. input price variables
b. technology or input cost variable
c. supply produced variable
d. acreage would not be a variable to consider in crop production |
a |
0 |
jenmn2010 Wed, 25 Nov 2009 04:27:06 GMT |
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which of the following must be true if you shift supply?
a. the slope of the supply curve changes.
b. the supply curve will slope downward.
c. the supply curve will be vertical.
d. at a given price the quantity will inc or dec |
d |
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jenmn2010 Wed, 25 Nov 2009 04:27:06 GMT |
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in ag commodities, most supply elasticities are expected to be:
a. >1
b. = 1
c. b/t 0 &1
d. = 0 |
c |
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jenmn2010 Wed, 25 Nov 2009 04:22:50 GMT |
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an elasticity value greater than one is said to be:
a. elastic
b. inelastic
c. infinitely elastic
d. unitary elastic |
a |
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jenmn2010 Wed, 25 Nov 2009 04:22:50 GMT |
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movements along the supply curve represents a:
a. change in supply
b. change in production function
c. change in elasticity
d. change in the quantity supplied |
d |
0 |
jenmn2010 Wed, 25 Nov 2009 04:22:50 GMT |
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which of the following represents the individuals supply curve?
a. Average cost curve
b. marginal cost curve
c. total cost curve
d. variable cost curve |
b |
0 |
jenmn2010 Wed, 25 Nov 2009 04:22:50 GMT |
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The non-economic basis of supply is?
a. a preference function
b. a production function
c. a cost function
d. a supply curve |
b |
0 |
jenmn2010 Wed, 25 Nov 2009 04:19:32 GMT |
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| A genetically modified corn variety with improved yields would be expected to shift the supply curve for corn. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 04:19:32 GMT |
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| Time lags are frequently required in estimating supply equations b/c of real world lags between observed prices and the actual production change. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 04:19:32 GMT |
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| Estimating a supply equation is a 4 step process including: selection of variables, collection of data, selection of functional form and the actual estimation. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 04:19:32 GMT |
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| The supply elasticity of a linear supply function is represented simply by the coefficient on the output price of the equation. T/F |
False |
0 |
jenmn2010 Wed, 25 Nov 2009 04:13:46 GMT |
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| A t-statistic provides an indication of the significance of a specific coefficient. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 04:13:46 GMT |
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| The supply of livestock in the next month is expected to be relatively inelastic. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 04:13:46 GMT |
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| Input prices enter the supply function through the cost function. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 04:13:46 GMT |
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| Supply shifters represent a change in the quantity supplied rather than a change in supply. T/F |
False |
0 |
jenmn2010 Wed, 25 Nov 2009 04:11:32 GMT |
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| a Production function does not include any economic relationships, but only technical relationships between inputs and outputs. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 04:11:32 GMT |
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Storage costs include the cost to ship a product from one location to another.
T/F |
False |
0 |
jenmn2010 Wed, 25 Nov 2009 04:11:32 GMT |
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why does a lagged dependent variable tend to improve supply estimation?
a. it provides a way to include previous information on the quantity produced into the current estimation
b. it provides additional data
c. it does not typically improve supply estimation
d. it includes forecast information on quantities and prices |
a. it provides a way to include previous info on the quantity produced into the current estimation |
0 |
jenmn2010 Wed, 25 Nov 2009 04:11:32 GMT |
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A scatter plot of supply data is a plot of which variables?
a. price and time
b. quantity and time
c. price and quantity
d. input price and output price |
c. price and quantity |
0 |
jenmn2010 Wed, 25 Nov 2009 04:07:48 GMT |
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If you were attempting to estimate the supply behavior of cattle markets over cattle cycles which last on average 10 years, which duration and periodicity would you prefer?
a. 10 years of annual data
b. 5 years of monthly data
c. 1 year of weekly data
d. 100 years of annual data |
d. 100 years of annual data |
0 |
jenmn2010 Wed, 25 Nov 2009 04:07:48 GMT |
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which of the following terms refers to the difference in prices between two locations?
a. spatial basis
b. temporal basis
c. transformation basis
d. futures basis |
a. spatial basis |
0 |
jenmn2010 Wed, 25 Nov 2009 04:07:48 GMT |
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| suppose you have estimated a supply equation as Q = 5.42 + .73 * 3 and the average price is $4/bushel, the average quantity is 10 million bushels and the R2 value is .91. what is the elasticity of supply? |
0.29 |
0 |
jenmn2010 Wed, 25 Nov 2009 04:07:48 GMT |
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which of the following statements best describes the interpretation of R2 when estimating a supply equation?
a. the significance of an estimated coefficient
b. the amount of variation explained by the equation
c. the elasticity of supply
d. the slope of the supply curve |
b. the amount of variation explained by the equation |
0 |
jenmn2010 Wed, 25 Nov 2009 04:01:06 GMT |
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which of the following is not a cost related to storage?
a. freight cost
b. depreciation costs
c. interest costs
d. product spoilage |
a. freight cost |
0 |
jenmn2010 Wed, 25 Nov 2009 04:01:06 GMT |
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a supply curve is derived from the sum of the:
a. average cost curves
b. production function
c. demand curves
d. marginal cost curves |
d. marginal cost curves |
0 |
jenmn2010 Wed, 25 Nov 2009 04:01:06 GMT |
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which functional form yields a non-linear supply curve?
a. double log
b. linear
c. quadratic
d. all |
c. quadratic |
0 |
jenmn2010 Wed, 25 Nov 2009 04:01:06 GMT |
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| why don't producer's adjust to take advantage of seasonal price patterns? |
1. prices are poor indicators of profits. For example, feed costs are typically highest in the spring and summer before the new crop -- therefore, seasonal price is likely to occur at time of higher costs. In the case of beef it still appears to be cheaper to graze available grass than to harvest and store hay and corn
2. weather conditions still affect productivity and costs of production -- more expensive to keep animals in confinement in weather extremes. |
0 |
jenmn2010 Wed, 25 Nov 2009 02:43:40 GMT |
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| Entering seasonal patterns can be helpful for short term marketing decisions: |
1. entering into seasonal increase, may store crops longer to gain higher prices or put additional weight on livestock to gain from price increase
2. entering into seasonal decline, may sell animals at slightly lighter weights or market grains sooner |
0 |
jenmn2010 Wed, 25 Nov 2009 02:16:23 GMT |
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| why is a seasonality index used? |
because it adjusts for year to year price differences which occur. |
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jenmn2010 Wed, 25 Nov 2009 02:16:23 GMT |
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| how are seasonality charts created? |
seasonality index = average monthly price/average annual price
for each year and for each month |
0 |
jenmn2010 Wed, 25 Nov 2009 02:16:23 GMT |
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| seasonality demand factors |
holidays do have some short term effects - easter on pork and lamb thanksgiving on turkeys
-summer is traditionally high in meat consumption period - more people active and simply eat more - outdoor grilling has an effect |
0 |
jenmn2010 Wed, 25 Nov 2009 02:16:22 GMT |
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| seasonality supply factors (shifts) |
weather: effects on performance - particularly strong in cattle not as strong in swine in poultry which are confined
Biological relationships: harvest, storage - calving is primarily in the spring |
0 |
jenmn2010 Wed, 25 Nov 2009 02:10:25 GMT |
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| Seasonality |
refers to predictable price patterns which occur within a year |
0 |
jenmn2010 Wed, 25 Nov 2009 02:10:25 GMT |
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| Elasticity of natural logs |
d ln Q/d ln P |
0 |
jenmn2010 Wed, 25 Nov 2009 02:10:25 GMT |
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| Elasticity of supply for a quadratic equation |
Es = (b1 + b2 * P) * P/Q |
0 |
jenmn2010 Wed, 25 Nov 2009 02:10:25 GMT |
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| linear equations: elasticity |
Qs = a + b * P |
0 |
jenmn2010 Wed, 25 Nov 2009 01:37:15 GMT |
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| Elasticity of Supply in most general terms: |
E = change in Qs / Change in P * P/Q |
0 |
jenmn2010 Wed, 25 Nov 2009 01:37:15 GMT |
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| Log-Linear |
Log-Linear functions are in the same form as linear functions but the variables are first "transformed" by taking their natural logarithm usually noted by the notation ln. So, w/the linear form, the log-linear equation is:
ln Qs = a + b * lnP |
0 |
jenmn2010 Wed, 25 Nov 2009 01:37:15 GMT |
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| Quadratic Function |
a simple non-linear representation often used in estimation. A quadratic supply equation w/only the out price can be represented as:
Qs = a + b1 * P + b2 * P2 |
0 |
jenmn2010 Wed, 25 Nov 2009 01:37:15 GMT |
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| lagged supply |
The logic basically says that from year to year there are many factor that determine supply, but in most cases these factors remain somewhat stable (land, weather....) so that last year's observation of supply which included by extension all these background factors is a good predictor of what will happen this year.
Qs= a + b * Pt + b2 * Qz, t-1 |
0 |
jenmn2010 Wed, 25 Nov 2009 01:31:46 GMT |
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| Supply Shifters |
1. change in the price of inputs to production
2. technology
3. number of sellers
4. future price expectations
5. taxes subsidies
6. government restrictions
7. weather
8. prices of related goods |
0 |
jenmn2010 Wed, 25 Nov 2009 01:31:46 GMT |
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| What is generally the elasticity in the long run for producers? |
In the long run all factors are variable and the supply is perfectly elastic. That is, producers can increase quantitates to any amount dedicated by price levels |
0 |
jenmn2010 Wed, 25 Nov 2009 01:31:46 GMT |
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| What is generally the elasticity in the short run for producers? |
in the short run, it is impossible for producers to respond to changes in price. Hence, thee supply in perfectly inelastic. In this case all factors (inputs) are fixed |
0 |
jenmn2010 Wed, 25 Nov 2009 01:31:46 GMT |
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| Perfectly elastic supply |
infinity |
0 |
jenmn2010 Wed, 25 Nov 2009 01:08:51 GMT |
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| Elastic Supply |
E > 1 |
0 |
jenmn2010 Wed, 25 Nov 2009 01:08:51 GMT |
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| perfectly inelastic supply |
E = 0 |
0 |
jenmn2010 Wed, 25 Nov 2009 01:08:51 GMT |
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| inelastic supply |
0< E<1 |
0 |
jenmn2010 Wed, 25 Nov 2009 01:08:51 GMT |
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| average cost |
cost per unit of output cost = r*x |
0 |
jenmn2010 Wed, 25 Nov 2009 01:03:15 GMT |
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| marginal cost |
cost of producing one more unit of output |
0 |
jenmn2010 Wed, 25 Nov 2009 01:03:15 GMT |
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| Producers attempt to minimize costs, so this is why it is in their best interest to produce on the production function rather than under it. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 01:03:15 GMT |
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| Cost of Production |
Cost (C) = r*x: y = f(x)
where r = input price, x = input quantity, y = output |
0 |
jenmn2010 Wed, 25 Nov 2009 01:03:15 GMT |
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| Law of Diminishing Marginal Product |
at some point, as add more variable input to a fixed input to a fixed input, the increase in out declines |
0 |
jenmn2010 Wed, 25 Nov 2009 00:58:41 GMT |
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| Producers can produce over the production function. T/F |
False |
0 |
jenmn2010 Wed, 25 Nov 2009 00:58:41 GMT |
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| Producers can produce on the production function. T/F |
True: BEST!! |
0 |
jenmn2010 Wed, 25 Nov 2009 00:58:41 GMT |
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| Producers can produce under the production function. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 00:58:41 GMT |
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| No output can be produced without input. T/F |
True |
0 |
jenmn2010 Wed, 25 Nov 2009 00:37:27 GMT |
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| What is the X and Y in a production function? |
X: input (corn, soybeans, medication, labor)
Y: output (swine, cattle, beef, pork, chickens) |
0 |
jenmn2010 Wed, 25 Nov 2009 00:37:27 GMT |
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| What is a production function? |
it is a function that explains the relationship of inputs to outputs and tells us what is possible to produce in the real world. IT leads to cost b/c it tells us the quantities of inputs we will need to obtain a desired level of output or conversely, the output level we can achieve with a given level of inputs and we must pay for those inputs. |
0 |
jenmn2010 Wed, 25 Nov 2009 00:37:27 GMT |
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| How are prices in a "perfect market" determined? |
By the interaction of supply and demand. Producers generate supply and consumers generate demand, and the market interaction determines prices. |
0 |
jenmn2010 Wed, 25 Nov 2009 00:37:27 GMT |
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