Agricultural & Applied Economics Association (AAEA)

USA · AAEA · professional

2practice questions written to this syllabus

2subjects

Format

No examination or certification. Offers a Fellows programme, awards and mentoring.

Over the years

Listed so that students do not look for an AAEA credential that does not exist.

Official source: https://www.aaea.org/

Subjects this exam draws on

Agricultural Marketing & Price Analysis1 questions Agri Risk Management & Insurance1 questions

Five practice questions, worked

Original questions written to this exam's published syllabus and pattern. Not past papers.

1. Under current US farm programmes, which instrument sets an effective price floor without government purchasing the crop outright in normal years?

Marketing assistance loans with loan rates
Buffer stock purchases by a national food corporation
A national minimum support price enforced on private traders
Export subsidies

Answer and working

A. Marketing assistance loans with loan rates

Marketing assistance loans let farmers borrow at a loan rate and repay at the lower market price if prices fall, creating a floor. Price Loss Coverage and Agriculture Risk Coverage (2014 Farm Bill) support income. The US does not run a food-corporation buffer or enforce support price on traders.

Agricultural Marketing & Price Analysis · Agricultural price policy

2. A revenue protection policy has APH 150 bu/acre, coverage 80%, projected price $4.00 and harvest price $5.00. Harvested yield is 100 bu/acre. What is the indemnity per acre?

$80
$0
$250
$100

Answer and working

D. $100

The revenue guarantee uses the higher of projected and harvest price: 150 x 0.80 x $5.00 = $600. Revenue to count = 100 x $5.00 = $500. Indemnity = $600 - $500 = $100. Using the projected price for both gives $80; mixing prices (guarantee at $4, revenue at $5) gives $0; leaving out the coverage level gives $250.

Agri Risk Management & Insurance · Yield-index insurance

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