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Farm Management 9th Edition By Ronald Kay – Test Bank
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Farm Management 9th Edition By Ronald Kay – Test Bank

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Farm Management 9th Edition By Ronald Kay – Test Bank

CHAPTER 11

SAMPLE TEST QUESTIONS– MULTIPLE CHOICE

 

  1. In whole farm planning it is assumed that when _____________________ is maximized, total profit is also maximized.
  2. profit per unit
  3. gross margin per unit
  4. total gross margin
  5. total gross income

 

 

  1. The purpose of completing a whole farm budget is:
  2. to compare which enterprises are most profitable
  3. to project how much operating capital you will need to borrow in each period during the coming year
  4. to evaluate the effect on profit of one particular management change
  5. to estimate the net income from all enterprises combined

 

  1. When developing a whole farm plan and no more enterprises can be added because one resource is exhausted, it may still be possible to increase gross margin by replacing one enterprise with another enterprise that has a higher gross margin per:
  2. acre
  3. bushel
  4. unit of an excess resource
  5. unit of the limiting resource

 

  1. An advantage of using linear programming to develop a whole farm plan is:
  2. it uses only simple math
  3. it can quickly analyze a large number of activities and resources
  4. it contains built-in default data
  5. it requires very little data

 

  1. Farming systems analysis takes into account:
  2. interactions among different enterprises
  3. possible variations in key values such as selling prices
  4. different types of production technology
  5. specialized labor needs

 

  1. Sensitivity analysis looks at the change in total profit caused by:
  2. a change in selling prices
  3. a change in yields
  4. a change in the price of a key input
  5. any of the above

 

 

  1. The purpose of liquidity analysis is to estimate if:
  2. the supply of labor on the farm will be sufficient to carry out the plan
  3. the supply of irrigation water will be sufficient to carry out the plan
  4. cash inflows will be sufficient to meet expected cash outflows
  5. net farm income will be positive or negative

 

  1. When comparing several long-range whole-farm budgets with different quantities of major fixed resources, such as owned land or permanent labor, the prices used to estimate gross income should be:
  2. current prices on the date the budget is made

 

  1. prices expected when this year’s products are sold
  2. average prices from the most recent year
  3. expected average prices over the next several years

 

  1. A whole-farm budget contains:
  2. costs, returns, and resource needs for a specific set of enterprises
  3. costs and returns that would be affected by a specific management change
  4. projected costs and returns for one unit of a specific enterprise
  5. the actual costs and returns that were realized during one year for all the enterprises on a farm

 

  1. “Technical coefficients” for whole-farm planning refer to:
  2. the estimated gross margin for one unit of each enterprise being considered
  3. the quantity of each resource that is available
  4. the quantities of resources needed to produce one unit of each enterprise being considered
  5. the total quantity of each resource needed for a given farm plan
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