Ag Marketing Chapter 2

T or F: Competition plays a key role in fostering physical efficiency.

False

T or F: Food marketing system is perfect and conflict-free. And every participant in the system has the same goal.

False

T or F: In general, a structure of low concentration is assumed to allow firms in the industry to conduct themselves in such a way that result in poor performance.

False

T or F: New technology can increase price efficiency, but reduces physical efficiency.

False

T or F: Since it costs more to deliver milk to the home than to sell it in grocery stores, home delivery is an inefficient form of marketing.

False

T or F: When talking about the theory of industrial organization, the conduct of an industry decides its structure and performance.

False

True or False: Middlemen exist in the food marketing system will cause high food price and lower efficiency.

False

Which industry sector has had the greatest increase in labor productivity in the past three decades?

Farming

Which of the following is correct about the basket of goods that makes up a country's consumer price index (CPI)?

It updates the prices of the goods in the basket annually, but keeps the goods constant

_________ risk refers to those that occur because of changes in value of a product as it is marketed.

Marketing

___________ efficiency refers to physical changes that reduce input relative to output, or is concerned with maximizing output/input ratios.

Operational

__________ risk refers to those that occur from destruction or deterioration of the product itself by fire, accident, wind, earthquake, or other means.

Physical

__________________ efficiency is concerned with the success of the price system in efficiently allocating resources

Pricing

Which of these marketing functions is caused by food price variability?

Risk bearing

Which of these is true of food marketing functions? They cannot be performed by farmers They reduce the costs of marketing foods They add value to farm products They can be eliminated They should only be performed by middlemen

They add value to farm products

T or F: Agent middlemen receive income from fees and commissions.

True

T or F: Better labeling can increase price efficiency, but reduces physical efficiency.

True

T or F: Food processors & manufacturers specialize in adding time, place, and possession utility to raw farm products.

True

T or F: Functional approach can help improve the performance of the marketing machinery.

True

T or F: In general, the more and/or more complex functions performed, the greater the cost of marketing.

True

T or F: Sometimes, an increase in one type of efficiency often results in a decrease in the other.

True

T or F: Specialized middlemen exist because they can perform those functions more efficiently, and lower the marketing cost.

True

T or F: Speculative middlemen are those who buy and sell products with the purpose of profiting from price movement.

True

T or F: When evaluating of market performance, "Good" performance to one participant may be "bad" to another.

True

T or F: When talking about the theory of industrial organization, the performance of an industry refers to how well society's expectations are met.

True

True or False: Functional approach can help managers to understand the difference in marketing costs of various commodities.

True

In which of these markets does the farmer perform the most marketing functions?

U-Pick operations (or farm roadside markets)

Overall, the CPI tends to _____ the increases in the true cost of living.

accurately reflect

Institutions are ____________________ that are involved in the marketing process

agencies or businesses

As an agent middleman, _______________________________ does not have physical control of the product.

broker

Which of these middlemen do not take title and physical possession of food products?

brokers

As an agent middleman, _________________________ takes over the physical handling of the product.

commission man

The major groups of functions are:

exchange, physical, facilitating

Major categories of institutions in the marketing systems are:

merchant middleman, agent middlemen, speculative middlemen, food processor, facilitative organization

Efficiency is measured as the ratio of ______________

output/input

Economists classify risks in the marketing system into two categories, which are ____ risks:

physical and marketing

Merchant middleman includes :

wholesalers and retailers

The institutional approach breaks down the marketing system in terms of ________________.

"Who"

The functional approach breaks down system in terms of ______________________________.

"what" is done.

A marketing function is a market _____ .

Activity

Pricing efficiency is less than perfect when prices fails to: (a) fully represent consumer preferences. (b) direct resources from lower to higher-valued uses. (c) coordinate the buying and selling activities of farmers, marketing firms, and consumers

All three

The index used most often to measure inflation is the:

Consumer Price Index (CPI)