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EQ #2 AGEC 105 - Capps (4 pts ) September 12, 2011

EQ #2 AGEC 105 - Capps (4 pts ) September 12, 2011.

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EQ #2 AGEC 105 - Capps (4 pts ) September 12, 2011

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  1. EQ #2 AGEC 105 - Capps (4 pts) September 12, 2011 • Suppose that Trent Lewis, a rice farmer near Beaumont, Texas, garners $650,000 in gross farm income and incurs production expenses of $300,000. In addition, suppose that the CPI was 2.00. Further, suppose that Trent Lewis has assets totaling $17 million and liabilities totaling $9 million. • What is the real net farm income of Trent Lewis? • The equity for this rice farmer is $___________ million. • Another term for equity is _______________. • The portion of food expenditures associated with the activities of firms beyond the farm gate is known as the _______________. (1 pt) (1 pt) (1/2 pt) (1/2 pt)

  2. Consider the following chart. • Assuming total utility is defined as U =2*W*CC, • (1/2 pt) (a) Which bundle has the highest level of total utility? • (1/2 pt) (b) Which bundle has the lowest level of total utility?

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