Opportunity costs are:

Opportunity costs are:

Answer: the cost of using a resource in one way based on the return that could be obtained from using it in the best alternative way

A measurable point where an increase in the addition of a variable cost item decreases the actual output of an enterprise is referred to as

A measurable point where an increase in the addition of a variable cost item decreases the actual output of an enterprise is referred to as

Answer: diminishing returns

The cost of producing one additional unit of output is called:

The cost of producing one additional unit of output is called:

Answer: marginal cost

Inflation means:

Inflation means:

Answer: the purchasing power of a dollar declines over time

The process of finding the present value of a dollar to be received at some future date is known as:

The process of finding the present value of a dollar to be received at some future date is known as:

Answer: discounting

Which of the following does not appear on the net worth statement?

Which of the following does not appear on the net worth statement?

Answer: net farm income

In developing an enterprise budget, crop insurance should be considered as:

In developing an enterprise budget, crop insurance should be considered as:

Answer: a variable cost.

The producer of a commodity which has an inelastic demand knows that:

The producer of a commodity which has an inelastic demand knows that:

Answer: if less is produced by the industry, total industry revenue will increase.

A legal document by which a property owner transfers the title of his land to someone to manage and safeguard for the benefit of beneficiaries is a:

A legal document by which a property owner transfers the title of his land to someone to manage and safeguard for the benefit of beneficiaries is a:

Answer: trust.

Rate of return on investment for a farm business is calculated by:

Rate of return on investment for a farm business is calculated by:

Answer: dividing return to capital by average total assets.

A banker loaning money to farm operators may require a cash flow analysis to:

A banker loaning money to farm operators may require a cash flow analysis to:

Answer: evaluate loan repayment potential.

Net farm income represents a return to what factors of production?

Net farm income represents a return to what factors of production?

Answer: management, capital, and unpaid operator and family labor

An advantage of making an estate the beneficiary of a life insurance policy is to:

An advantage of making an estate the beneficiary of a life insurance policy is to:

Answer: provide liquid funds to satisfy tax liability.

A feedlot operator purchased 100 feeder steers with an average weight of 700 pounds and sold them at an average weight of 1050 pounds. Total feed cost for the pen was $18,000. Feed cost per pound of gain was equal to:

A feedlot operator purchased 100 feeder steers with an average weight of 700 pounds and sold them at an average weight of 1050 pounds. Total feed cost for the pen was $18,000. Feed cost per pound of gain was equal to:

Answer: $0.514

A livestock producer wishing to use futures markets to hedge the price of cattle to be sold in the future would initially:

A livestock producer wishing to use futures markets to hedge the price of cattle to be sold in the future would initially:

Answer: sell futures contracts expecting to buy them back when he sells his cattle.

Accrued interest on a balance sheet refers to:

Accrued interest on a balance sheet refers to:

Answer: interest that has accumulated since the last loan payment

If a hedger is to carry a hedge through completion, the hedger:

If a hedger is to carry a hedge through completion, the hedger:

Answer: must be prepared to meet all margin calls.

A dollar received tomorrow can be worth less than a dollar today, because of:

A dollar received tomorrow can be worth less than a dollar today, because of:

Answer: the time value of money.

It is profitable for a farmer to borrow money to expand his farm business when the borrowed money:

It is profitable for a farmer to borrow money to expand his farm business when the borrowed money:

Answer: returns more than the cost.

The return an input would have earned in its best alternative use is called its:

The return an input would have earned in its best alternative use is called its:

Answer: opportunity cost.