Multi-choice Flash
Agricultural Business Management 100 with Cheney at Michigan State University
About this deck
By: Ashley Redmond
Created: 2010-04-29
Size: 98 flashcards
Views: 55
Created: 2010-04-29
Size: 98 flashcards
Views: 55
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Institutional wholesalers typically do not sell to
Food Retailers
What agri-food player is generally closer to the final
consumer?
The Food Manufacturer
A commodity processor would most likely sell
Wheat flour to Kraft Foods
Which of the following is not a current trend in the
agri-food system?
Major/Large grocery retailers are acting as their own
wholesalers
A wholesaler who stores jars of peanut butter and then
delivers them to the retailer primarily provides what types of value?
Time and Place value
Which one of the following players is least likely to
add form value?
The assembler
According to the video From Farm to Table, once the
commodity leaves the farm, the average food item travels _____ and changes
hands _____ before it reaches you
1300 miles, 6 times
A firm that buys raw agricultural products and
processes them into food ingredients would be considered
A commodity processor
Since WWII, the share of income that consumers spend
on food has been
Decreasing
Which unique factor accounts for the reason that
initial processors tend to be located near agricultural production areas rather
than near final consumption regions?
Geographical
Approximately, what quantity of food is consumed away
from home?
1 out of every 3 meals (33%)
Which of the following is not a likely reason for the
upward trend in the Food Marketing Bill?
Greater preference for imported foods
Which one of the following is not a trend in
production agriculture (farm-level)?
Less dependence on global food market
The value of total expenditures on food and alcoholic
beverages in the United States is approximately
$900 billion to $1 trillion
The largest component of the Food Marketing Bill is
Labor
Which of the following statements is false regarding
how changing demographics will influence the future of the U.S. agri-food
system?
Consumers will place less emphasis on food quality
attributes and more emphasis on price when purchasing food or food products
If ice cream and popsicles are substitutes, one would
expect that a decrease in the price of ice cream would cause the demand for
popsicles to
Decrease
Which of the following is considered one of the top
three export destinations for U.S. agricultural and food products?
Japan
Assume that an early frost destroys much of the fresh
orange crop in California. This event
will most likely affect the market for fresh oranges in the following way
Shift the supply curve, increasing the price and
decreasing the quantity traded in the market
The fact that there are only a few dominant players in
the corn seed supply business is an example of
Market power
Last week the price of strawberries was $2/lb and
45lbs were traded. This week the price
of strawberries was $3/lb and 55lbs were traded. What must have happened in the strawberries
market?
The demand curve increased, increasing both the price
and the quantity traded in the market
Which of the following is not a demand shifter?
Price of a good
In the 20th century, substantial increases
in agricultural productivity occurred, primarily due to technological
advances. These increases in
productivity have led to
Increased dependence on global markets for our
exports, less diversification at farm level and a decline in the number of
firms
The four-firm concentration ratio for an industry is
defined as the
Sum of the sales by the 4 largest firms divided by
total industry sales
If the price of wheat increases, we expect the
following effects on the equilibrium price and quantity of Wheat Thin crackers
made from wheat
Price increases, quantity decreases
Which of the following would increase the demand for
corn?
An increase in demand for corn chips by consumers
Which of the following is not a typical objective of
government regulations in the agri-food system?
To increase market concentration
In futures markets, the buyer of a contract agrees to
Accept delivery according to the terms of the contract
In futures markets, a speculator
Hopes to sell high and buy low
If a corn farmer buys a corn futures contract when he
plants his corn, then he would be
Acting as a speculator
Hershey?s is planning for its Halloween production of
orange and black chocolate kisses (October 31st). In order to hedge its sugar input, the
company should
Buy an October futures contract now
Futures markets can be used to reduce commodity price
risk because
Futures and cash respond to the same supply and demand
factors
An agricultural price floor for sugar established above
the market equilibrium price will
Result in a surplus of sugar in the market
Which of the following is not standardized in a
futures contract?
Price
Suppose that, when income increases by 10%, the
quantity demanded of chicken increases by 2%.
From this information, one can conclude that chicken is
A normal good
Assume that the price of hot dogs at the Breslin
Center decreases by 4%. As a result, the
quantity demanded of hot dogs increases by 1.44%. The price elasticity of demand for hot dogs
at the Breslin Center is
-0.36
The elasticity of demand for eggs is equal to
-0.24. Thus, a 1% decrease in the price
of eggs will cause the quantity demanded of eggs to
Increase by .24%
Last October, a delegation of officials from Taiwan
met with Iowa corn growers and signed a letter fo intent to purchase nearly 400
million bushels of corn. In order to
estimate how this increased purchase of corn would impact the price of corn,
you would use
The elasticity of supply for corn
The supply of fish in the Grand haven market on a given
day is perfectly inelastic. A sudden
increase in the demand for fish that day will
Increase the price of fish, but have no effect on the
quantity supplied in Grand Haven
Assume that the demand for bubble gum is
inelastic. If high sugar prices decrease
the supply of bubble gum, what will be the impact on the total bubble gum
expenditures by consumers?
Consumer expenditures on bubble gum will increase
One of the reasons that private label products are
less expensive than national brand products is that more value is added in the
market channel for national brands on
Possession value
Assume that the short-run elasticity of supply for
apples is +0.35. In the long-run, which
of the following would be the most plausible number for the long-run supply elasticity
of apples?
+0.50
Little Caesars?s Pizza estimates that the price
elasticity for its pizza is -0.8. If
Little Caesar?s lowers its price on its pizzas by 10% then
Quantity demanded will increase by 8% and total
revenue will decrease
Which of the following would not shift the supply of
corn?
An increase in the price of corn
Which of the following would most likely cause,
ceteris paribus, a movement along the supply curve for corn?
An increase in demand for corn chips
Last week at Kroger?s, 250 heads of lettuce were sold
at $.79 per head. This week, 200 heads
were sold at $.59 per head. What must
have occurred in this market?
Demand shifted inward
A large increase in the soybean crop would lead to
what kind of event?
Shift in the supply curve, decreasing the price and
increasing the quantity traded in the market
If more people demand goat meat which market change
will occur?
The demand curve will increase and the quantity
supplied will increase
Assume there is an increase in marketing efficiency in
the food industry due to improvements in major roads used for moving product
from the farm to the retailer. This
shock will likely
Increase the farm price
Increased marketing efficiency in the agri-food system
will
Help the consumer and the farmer
Which of the following is a true statement regarding
trends in consumer food expenditures?
The aging of the U.S. population is likely to
contribute to an increased emphasis on the nutritional aspects of food products
A grain elevator who buys small quantities of corn
from farmers and sells large quantities of corn to the next player is an
example of an
Assembler
According to our current events discussion in class,
which one of the following statements is true regarding current events in the
U.S. poultry market?
American restrictions on Chinese imports of poultry in
the U.S. will lead to an increase in the U.S. poultry price
Approximately, what percentage of food expenditures is
for food purchased away-from-home?
50%
An economic stage is
Any value-adding process that moves the product closer
to final consumption
Which of the following is false regarding production
agriculture (farm level)?
Farmers account for approximately 8% of the population
At the last basketball game at the Breslin Center,
2000 hot dogs were sold at $2 per hot dog.
If at the next basketball game, 2275 hot dogs are sold at $1.50 per hot
dog, what must have occurred?
Supply increased
Which of the following would increase the demand for
corn?
An increase in demand for corn chips by consumers
Grocery wholesalers typically sale to
Food retailers
An increase in income that and a constant supply of
food leads to
Quantity and price of food increasing
A commodity processor would most likely sell
Wheat flour
A food manufacturer would most likely sell
Tofu burgers (made from soybeans)
If chips and salsa are complements and the supply of
chips decreases, then the likely impact on the salsa market will be that
The demand for salsa will decrease
Which of the following will not shift the supply curve
for peanut butter?
A change in income
Assume that in the middle of the growing season for
cherries, an outbreak of pests damages most of the cherry crop in the U.S. This shock will affect the cherry market in
the following way
Shift in the supply curve, increasing the price and
decreasing the quantity traded in the market
Which of the following would not cause a change in the
demand for peanut butter?
A change in the price of peanuts
An agri-food firm who takes commodity wheat, stores it
in grain bins, and then turns it into wheat flour primarily adds what types of
value?
Form and time value
If reduced trade restrictions allow for an increase in
imported poultry products into the U.S. from Canada and Mexico, what will be the
most likely impact on the equilibrium price and quantity in the U.S. poultry
market?
Quantity increased and price decreased
Which agri-food player is generally closest to the
food manufacturer?
The processor
Which of the following would most likely shift the
supply of wheat?
A change in the price of fertilizer used to produce
wheat
Due to the high level of market concentration, prior
to the merger the U.S. Justice Department investigated the beer industry to
determine if the merger would negatively impact the beer market channel by
Allowing breweries to exercise market power
A firm whose primary business function is to buy
agricultural commodities and sell food ingredients is most likely considered
An initial processor
Changes in the agri-food system that make the marketing margin smaller
Benefit both consumers and farmers
The difference between the farm level price of a product and the retail price is
The marketing margin
Which one of these would not lead to a change in the marketing margin
An increase in consumer income
Futures markets
Can be used as a price discovery tool
Assume there is an increase in marketing efficiency in the food industry due to improvements in major roads used for moving product from the farm to the retailer. This shock will likely
Increase the farm price
If a price decrease of 25% leads to an increase in the quantity demanded of 50%, ceteris paribus, the elasticity of demand would be
-2.0
If ice-cream manufacturers want to increase their revenue from sales, they should ___ the price if they think that demand is _______
Increase, inelastic
Generally speaking, which of the following is true
The elasticity of demand is more inelastic in the short run than in the long run
A bakery estimates that the elasticity of demand for its bread is -0.5. If the bakery raises the price of its bread by 10%
Quantity demanded will decrease by 5% and total revenue will increase
If the government wanted to use a food tax in order to significantly reduce the quantity of sweet and sugary drinks we consume, this could be accomplished with a relatively small food tax on these drinks if
Demand was relatively elastic
Which of the following is not considered an important role of futures markets
A means to buy or sell physical commodities
In November, a grain elevator manager buys some corn to store over the winter. He plans to sell the corn next March. In order to hedge the corn he should
Sell a March contract in November
If one wanted to estimate the impact on beef market resulting from the drop in pork price caused by a virus, on would need
The cross-price elasticity for beef with respect to the price of pork
If there is a dramatic increase in the supply of oranges
Both the futures price for oranges and the cash price for oranges will decrease
The cross-price elasticity of pork with respect to the price of chicken is .40, this means that
Raising the price of chicken by 10% will cause the quantity of pork consumed to increase by 4%
Futures markets can be used to reduce commodity price risk because
Both futures and cash prices respond to the same supply and demand factors
Assume that the short-run elasticity of demand for orange juice is +.18. In the long-run, what do you think would be the most plausible number for the long-run supply elasticity of apples
+.40
In futures markets, the seller of a contract
Agrees to make delivery according to the terms of the contract
The elasticity of demand for apples is -.45. Therefore, a decrease in the supply of apples would result in
An increase in total revenue for apple producers
Which of the following is true regarding private brand products?
A single food company may manufacture both a private brand and a national brand food product
Which of the following is true regarding commodity futures markets
Most of the people who trade futures are speculators
Assume that the price of oysters increases by 14%. As a result, the quantity demanded of oysters declines by 28%. Therefore, one can conclude that the elasticity of demand for oysters is
-2.0 (Because elasticity is ALWAYS negative)
Increases in agricultural output often lead to decreases in farm income because
The demand for agricultural products in relatively inelastic
Which of the following regions has the highest market penetration of private brand products
Europe
An inferior good is one that has
A negative income elasticity
About this deck
By: Ashley Redmond
Created: 2010-04-29
Size: 98 flashcards
Views: 55
Created: 2010-04-29
Size: 98 flashcards
Views: 55
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy
Kathy