ABM 3183 Exam #1

T/F Storage, transportation, and financing are facilitating functions.

false

T/F Farmers' micro marketing programs are typically much stronger than the procurement programs of their buyers.

false

T/F: The macro view of marketing is a comprehensive view of nearly all that occurs to a farm commodity between the farm gate and final consumer.

true

t/f: the exchange functions of marketing are selling and transportation

false

t/f The power to be a price maker guarantees the power to make economic profits

false

t/f: one of the important elements of marketing structure is the degree of product differentiation

true

t/f: perfect competition involves many buyers and sellers of a homogeneous commodity

ture

t/f: in terms of market models covered in ch. 2, the fast food restaurant industry most closely resembles perfect competition

false

t/f: micro marketing is more complex for the manager of a farm in perfect competition rather than oligopolistic competition

false

t/f: agribus handling commodities generally engage in less price competition than those merchandising differentiated products bc firms handling commodities aren't able to do much about fixing prices

false

t/f: agribusiness are generally the control center of the food and fiber system

true

t/f: convenience yield refers to the storage of commodities even though the market is not signaling storage opportunities

true

t/f: higher C4 ratios tend to be in grocery products such as breakfast cereals, rather than in fresh meats and produce

true

t/f: if the price of a farm commodity such as lettuce falls abruptly you can be confident that lettuce production costs have fallen

false

t/f: low prices usually "cure" low prices within a single production period

false

t/f: whereas seasonally refers to price patterns within a year, price cycles refer to patterns that may occur longer periods

true

t/f: engel's law states that as income increase, the proportion spent on food increases

false

t/f: the percentage of disposable income spent on food in the US is one of the highest of any nation in the world

false

t/f: one can infer that large price cross-elastics among commodities indicate that their relative prices influence relative levels of consumption over time

true

t/f: own-price demand elasticity may vary within the limits of plus or minus 1

false

Indicate market share of four largest firms in that market

Tend to be higher for highly processed products

four firm concentration ratios

o Refers to decreasing cost per unit as more is produced

o Contributes to growing specialization of production in agriculture

economies of size

Which of the following are true of perfect competitions

many competitors, easy entry and exit, homogenous products, price-taking aspects

Market with many sellers of somewhat differentiated products

monopolistic competition

Competition among a few firms, with possibly some product differentiation, could be...

oligopoly or oligopsony

The price for nonperishable crops typically follows a seasonal pattern of

Low harvest prices followed by increasing prices throughout the market year

The Law of demand states...

A larger quantity is demanded at a lower price than at a higher price

What is true about the largest food manufacturer in this country?

conglomerate firms producing many different food and non-food products

Where are food processors generally located?

in production areas if finished products can be shipped cheaper than raw products

Wheat marketing margins may rise in the same season as farm wheat prices fall because of which of the following?

large crop can depress prices while raising the demand for marketing services

Compared to fresh or relatively un-processed retail products greatly processing of agricultural commodities is generally indicative of

higher four firm concentrations, greater differentiation and marketing, smaller farmer shares of retail price and larger farm-retail margin

In considering agriculture prices...

degree of perishability has influence on short term price, storable products have more seasonal variability

Concerning current cash prices or ag commodities

normal levels are most affected by long-run supply curve, large variations year to year

Which of these are likely associated

all of the above

3 multiple choice options

What is not a shifter in demand?

change in price of a product

Which are inferior goods?

Eating less ramen and rice because you made more money

income elasticity of demand is less than zero

Why is consumer demand curve highly elastic?

many choices/ substitutes

Why is the farm-level supply curve highly inelastic?

biological lag factor, limited in how quickly supply can be adjusted

What are the three key questions economics seeks to answer?

What to produce, how to produce it, who to produce it for

What is the meaning of utility and how is it related to the consumer demand curve?

satisfaction/joy obtained by consumer from consuming good.

demand more at low prices, adjust satisfaction as prices change.

The more we consume, the less satisfaction from one more unit