Economics of Ag Business Management Exam 1

Characteristic(s) of a market-driven organization would include: "Sell what you have and do" "Focus on product and sales volume" "Solve a problem" None of the above

"Solve a problem"

What are the key functions of Agribusiness Management? Marketing Management Financial Management Supply Chain Management Human Resources Management All the above

All of the Above

A strategic marketing plan involves which of these marketing activity(ies) Choose a target market Develop the appropriate marketing mix Choose a position All of the above

All of the above

Adjustments by international agribusiness firms are generally made in the area of Product adaptations Individual changes Institutional adaptations All of the above

All of the above

Advantage(s) of a proprietorship form of organization is (are) Minimal legal requirements needed to start Owner has complete control over the business Pays no income tax as a separate business entity All of the above

All of the above

Advantage(s) of a strategic alliance is (are) Firms can collaborate on technology or the development of new products Firms can improve supply chain efficiency Firms can gain economies of scale in production and/or marketing All of the above

All of the above

An organizational chart shows the formal organization structure of a company and captures ideas about: Division of labor Chain of command Bureaucracy All of the above

All of the above

Control complements the other three tasks of management because it compensates for: Misjudegments The unexpected The impact of change All of the above

All of the above

Example(s) of a regional trade group would be APEC EU ASEAN All of the above

All of the above

Example(s) of high-value products would include Fresh fruit Beverages Frozen dinners All of the above

All of the above

Example(s) of psychographic or behavioral market segmentation for branded food products would include: "The healthy lifestyle" "Gourmet" "Young and rebellious" All of the above

All of the above

Explanations for the existence of profits in our market-oriented, capitalistic economy include: Risk-taking Control of scarce resources Some people have access to information that is not widespread All of the above

All of the above

Strategic planning by top management in an agribusiness would include the following characteristic(s): Written analysis Broad Long term All of the above

All of the above

The benefit(s) firms receive from doing business internationally include Take advantage of scale economies Capture benefits of a global brand Reduce risk by diversifying across markets All of the above

All of the above

The farm input supply sector includes: Manufacturing Distribution Services All of the Above

All of the above

To be a good manager one must be: A good communicator A good motivator Technically knowledgeable about the product or service All of the above

All of the above

Unique dimension(s) of the food and agribusiness markets include: Rural ties Food as a product Government involvement All of the above

All of the above

Well-defined market segments will have what three characteristics (pass what three "tests")? Measurable Substantive Actionable All of the above

All of the above

What key decisions must a marketer make (also known as the marketing mix)? Product Price Promotion Place All of the above

All of the above

When conducting a SWOT analysis, include: General trends in the market Strengths and weakness of key competitors Current and anticipated customer needs All of the above

All of the above

The sector(s) of the food production and marketing system is (are): Food Sector Production Agriculture Sector Input Supply Sector All the above

All the above

Management is defined as the ___________ of successfully pursuing desired results with the resources available to the organization. Art and science Art Science Humanities

Art and science

Macroeconomics is the: Big picture" view of our economic system Factors of production Prime resources Customer needs

Big picture" view of our economic system

Qualification(s) that must be met to form an S-corporation include: Cannot be more than 100 stockholders Stockholders must be individual persons rather than corporations The election to be taxed as individuals may occur any time during the fiscal year, but prior to filing income taxes each year Domestic corporation Both a and b

Both a and b

The development of alternative plans for various possible business conditions is called: Strategic planning Tactical planning Contingency planning None of the above

Contingency planning

The ___________ task represents monitoring the evaluation of activities. Goals Mission statement Management by exception Controlling

Controlling

Three of the four key tasks of agribusiness managers are: Planning, coordinating, directing Directing, planning, communicating Controlling, directing, planning Motivating, controlling, directing

Controlling, directing, planning

A ______________ is a small grocery store, selling a limited variety of basic foods, snack foods, and nonfood products, typically with extended hours. Supercenter Superstore Convenience store Warehouse Club

Convenience Store

_____________. may be defined as the quantities that consumers are willing and able to buy in the market at different prices. Supply Demand Producer Consumer

Demand

Grouping customers according to age, income, and education is called __________ segmentation. Geographic Demographic Operating characteristics Psychographic

Demographic

Professor Michael Porter suggests that to build a competitive advantage a firm must create: Differential advantage Comparative advantage Both Neither

Differential advantage

When a firm handles the details of exporting their product it is called Joint exporting Indirect exporting Direct exporting Outsource exporting

Direct exporting

A disadvantage of forming a corporation is that Stockholders are not personally liable for the debts of the corporation Double taxation Perpetual life All of the above

Double Taxation

Economist care about? Accounting profit Economic profit Revenue only Cost only

Economic profit

What is not a factor of production? Management Elasticity Land Labor

Elasticity

Major factor(s) that cause the demand curve to shift include: Change in technology Expectations Weather Number of suppliers

Expectations

A cross-price elasticity of 1.0 indicates two goods can be classified as independent. True False

False

A shortage occurs when a firm charges a price that is too high. True False

False

Accounting methods for noncurrent assets, such as machinery, are standardized across the world to facilitate trade. True False

False

In 2013, for every dollar spent on food, 83 cents went to the farmer. True False

False

In a limited partnership, each individual partner, regardless of the percentage of capital contributed, has equal rights and liabilities, unless stated otherwise in a partnership agreement. True False

False

Leadership only involves providing instructions on how to complete a task and information on the desired results. True False

False

Organizations that focus primarily on communicating the benefits of their products are called market-driven. True False

False

Organizing is defined as guiding the efforts of others toward achieving a common goal. True False

False

Tactical planning is focused on developing courses of action for the longer term. True False

False

The "statement of cash flows" does exist in all countries. True False

False

The greatest advantage of the corporate form of organization is taxation and regulation. True False

False

The last step in the planning process is to develop a means of implementing the plan. True False

False

When dealing in the area of international business, you should always expect foreign clients to be on time for appointments. True False

False

Which of the following has provided 40 percent of the total debt capital needed by the farm production system for farmland and operating funds in recent years? Farm Credit System John Deere Farm Financial Standards Council U.S. Bank

Farm Credit System

The _______________ breaks down the proportion of the consumer's food dollar that goes to the farmer for raw products and that goes to the food and industry for "marketing" those products to end consumers. Farm-food marketing bill Farm bill Treasury bill Legislation bill

Farm-Food marketing bill

The food retailing sector accounts for 13.1 percent of the value-added to the consumer food dollar. The food retailing sector consists of the following types of firms, except Supercenter Superstore Fast Food/Quick Service Warehouse Club

Fast Food/Quick Service

In 2013, the largest component of the farm-food marketing bill was: Food processing Transportation Food services Energy

Food Services

The __________ closely tracks consumer tastes and preferences and includes food processing, marketing, and distribution. Food Sector Production Agriculture Sector Input Supply Sector All the above

Food sector

___________ are the specific quantitative or qualitative aims of the company or business group that provide direction and standards that can be used to measure performance. Goals Mission statement Management by exception Controlling

Goals

Advantage(s) of exporting over the other methods of entry into another country is (are) Increased speed in reaching the global market Opportunity to manage trade barriers Control over pricing Control over distribution

Increased speed in reaching the global market

Using a trading company or an expert management company to handle the logistics of exporting is called ________. Indirect Licensing Direct investment Joint venture

Indirect

If the income elasticity of demand is -0.5, the goods are: Complements Substitutes Inferior Normal

Inferior

The food wholesaling industry in the food sector consists of the following types of firms, except: Merchant Wholesalers Manufacturers' Sales Branches and Offices Wholesale Agents and Brokers Institutional Food Service

Institutional Food Service

A ______ ______ is a form of strategic alliance that involves two or more firms that share resources in research, production, marketing, or financing, as well as costs and risks. Acquisition Joint venture Greenfield investments None of the above

Joint venture

A mission statement usually includes three parts, which are: Profits, contribution, market share Distinction, contribution, profits Market share, distinction, contribution Key markets, contribution, distinction

Key markets, contribution, distinction

A management technique that holds the premise that managers should not spend time on areas that are progressing according to plan; but rather, concentrate on areas that are not progressing as planned is called ____________________. Goals Mission statement Management by exception Controlling

Management by exception

If clearly definable differences between market segments do not exist the best market strategy is the: Market segmentation strategy Mass market strategy Sales strategy None of the above

Mass market strategy

_____________. is the application of basic economic principles to decisions within the firm. Microeconomics Labor economics Macroeconomics Agricultural economics

Microeconomics

A ___________ helps to spell out the direction for a firm and describes the destination. Goals Mission statement Management by exception Controlling

Mission statement

An example of a high-value product is Wheat Corn Soybeans None of the above

None of the above

The process of creating the desired image in the customer's mind is called: Competitive advantage Differential advantage Cost advantage None of the above

None of the above

Analysis of alternatives in decision-making should include Personal opinion Only subjective measures Objective measures Astrology

Objective measures

What is not included in the SWOT analysis? Strengths Weaknesses Objectives Threats

Objectives

If clearly definable differences between production technologies exist for farmers in a firm's target market, an agribusiness should use a _________ ____________ strategy. Operating characteristics segmentation Geographic segmentation Psychographic segmentation None of the above

Operating characteristics segmentation

Setting up the structure, determining the jobs to be done, and defining lines of authority and responsibility are known as Planning Organizing Directing Controlling

Organizing

As producers and consumers meet in the marketplace, an equilibrium quantity and price are determined. The process is called _____________. Price discovery Willingness to pay Willingness to accept Fixed price

Price discovery

If the price elasticity of demand is 1.3, the demand is: Price elastic Price inelastic Unitary Inferior

Price elastic

A step-by-step guide to implement a policy for a specific activity is called a: Practice Role Procedure None of the above

Procedure

A partner is an individual who cannot take an active role in management, but is known to be a partner by the general public. Dormant Secret Silent Nominal

Silent

If the cross-price elasticity of demand is 1.9, the items are: Complements Substitutes Independent Price elastic

Substitutes

A corporation is a special legal entity endowed by law with the powers, rights, liabilities, and duties of a person. True False

True

A disadvantage of licensing is that a licensor could find its brand image hurt if the licensee has not maintained sufficient control over the product quality or promotion. True False

True

A factor that is opening the doors of world markets for smaller businesses is technology. True False

True

A partnership pays no income tax as a separate business entity. True False

True

A relatively new type of business organization that closely resembles a partnership, but provides its members limited liability is a limited liability company. True False

True

Each state has what are called "blue-sky laws," which regulate the way in which corporation stock may be sold and which protect the rights of investors. True False

True

Economics is defined as the study of how scarce resources are combined to meet the needs of people in a society of unlimited wants. True False

True

Food processing and manufacturing involves turning raw agricultural commodities either into ingredients for further processing or final consumer products. True False

True

Forecasting change is a key element of good planning. True False

True

If demand is price elastic, total revenue increases when price decreases. True False

True

One disadvantage of a cooperative is that in many states each member only has one vote regardless of how many shares of cooperative stock the individual owns. True False

True

Operations management focuses on the direction and the control of the processes used to produce the goods and services that we buy and use each day. True False

True

Production agriculture includes the farms and ranches that produce the crop and livestock products that provide inputs to the food and fiber sector. True False

True

Sanitary and phytosanitary regulations are intended to protect human, animal, or plant life or health. True False

True

Tactical planning is focused on what is done tomorrow, or next month, or next year, and can occur at any level in an organization. True False

True

The first step in developing a strategic marketing plan is to conduct a SWOT analysis. True False

True

The legal document that is filed with the state and which sets forth the basic purpose of a corporation and the means of financing is called the articles of incorporation. True False

True

The manner in which jobs are broken into components and then are assigned to members or groups is called the chain of command. True False

True

Well-stated goals should allow appraisal of the results contributed by each unit or person. True False

True

When the value of the US dollar decreases relative to the currencies of other competitors, US agricultural goods become less expensive. True False

True

Wholesale agents buy and/or sell as representatives of others for a commission, so they typically neither physically handle nor take title to the goods. True False

True

A disadvantage of a partnership is: Unlimited liability of each general partner It is about as easy to start as a proprietorship Partners, as individuals, pay income taxes only on the income generated from their share of the profit. None of the above

Unlimited liability of each general partner

Organizations that focus primarily on communicating the benefits of their products are Sales-driven. Product-Driven Market-Driven None of the above

sales-driven.