AEEC Final Exam

What three types of lags make agricultural products different from non-agricultural products?Explain with an example.

Biological Lag: A period between a decision to produce and actual harvest or collection of output. Production Lag: Period it takes to increase or decrease production Pyschological Lag: Lag time period of high and low prices before producers adjust production levels.

What are the direct and indirect competition? Give an example of each.

Businesses that compete directly usually offer similar products or services in the same market. Coca-Cola and Pepsi are direct competitors in the global soft drink market, but alternative beverages such as water, tea, and coffee are their indirect competitors.

What are the four assumptions of the cobweb model? Give an example of a commodity where the cobweb model can be used.

The assumptions are there is a production lag, future production planning is based on the current prices, supply is more sensitive to prices than the demand in the long run. An example is the weather.

What is the principle of comparative advantage? What products does your state, region, or country have a comparative advantage on and why?

Comparative advantage is the ability to produce a good or service for a lower opportunity cost. One example of a good that the United States has a comparative advantage producing over Mexico is corn.

What are competitive imports and complementary imports? Give examples

Competitive imports are goods and services which are also imported into the country. Complementary goods are two or more goods typically consumed or used together.

What is the difference between concentrated marketing and micro-marketing? Give an exampleof each. What is a major disadvantage of these types of marketing strategies?

Concentrated marketing focuses on a smaller market segment while micro-marketing targets individual customers.

Name two different pricing systems and explain two types under each pricing system.

Cost Oriented Pricing Method- It is the base for evaluating the price of the finished goods, and most of the company apply this method to calculate the cost of the product Market-oriented pricing - it means comparing the prices of similar products being offered on the market. The seller then sets the price higher or lower, or even the same as their competitors depending on how well their own product matches up to competitor products.

Define cross elasticity of demand? What is the value of cross elasticities of a substitute and a complement? Give examples of substitutes and complements.

The cross elasticity of demand is an economic concept that measures the responsiveness in the quantity demanded of one good when the price for another good changes. The cross elasticity of demand for substitute goods is always positive because the demand for one good increases when the price for the substitute good increases. Alternatively, the cross elasticity of demand for complementary goods is negative. For example, butter and margarine are substitutes for each other.

List four modes of transportation and state at least one advantage and one disadvantage of each mode. Which mode of transportation fits your business and why?

The four primary modes of transportation in logistics are shipments by truck, ship, train and plane

What are undifferentiated and differentiated products? Give an example of each. How are the marketing strategies different for undifferentiated and differentiated products?

Differentiated marketing focuses on a specific market, a "different" market, that is interested in buying a certain type of product. For example, a business selling organic dog food is looking to target a specific type of person - a health conscious, animal loving and eco-friendly individual. On the other hand, undifferentiated marketing is designed to appeal to a broad range of customers. An example of this would be a business that produces soft drinks and is looking to target anyone who is thirsty.

What is Engel's law? How can you over this issue of Engel's law in agricultural products?

Engel's law implies that when a country grows, the agricultural sector will constitute a smaller percentage of the country's economic activity. This is due to the fact that the share of income spent on food decreases as income itself increases.

What are transaction costs? Give examples.

Expenses incurred when buying or selling a good or service. Labor, transportation, broker fees, bank charges, commissions.

What are the definitions of farm value and marketing bill? What kind of agricultural products have marketing bills higher? Why do you think so?

Farm value is the price as of the valuation date for property used only for agricultural production. Marketing bill is the market value added to farm commodities embodied in a food dollar expenditure, measured as $1 minus the farm share. Fruits and vegetable have higher marketing bills.

What are the three differences between perfect competition and monopoly? Give an example of a perfectly competitive market and a monopoly

In a monopolistic market, there is only one firm that dictates the price and supply levels of goods and services, and that firm has total market control. In contrast to a monopolistic market, a perfectly competitive market is composed of many firms, where no one firm has market control. McDonalds is an example of a monopoly. Farmers selling the same crop every year is an example of a perfectly competitive market.

Why did the US almost run out of meat during the pandemic? What was the impact on ranchers and consumers?

The spread has shuttered plants, slowed production and created a ripple effect across the supply chain. Farmers and ranchers have hogs, cattle and chicken that they feed, but can't sell. Meatpacking plants don't have enough workers as they got sick

What are concentration ratios? Name two agricultural products having 4-concentration ratios of more than 40%.

The sum of the percentage market shares of the largest firms in an industry. Two agriculture products are corn and wheat.

What are the two advantages of cooperatives? What are the three disadvantages of cooperatives?

There are equal voting rights for members. this structure encourages member contribution and shared responsibility. liability for members is limited. there is no limit on the number of members. Although being part of a business collective can increase a company's purchasing power and cut its costs through service sharing, joining a cooperative can also have drawbacks. These include losing some control over operations and becoming less competitive.

What are trade barriers? State any three reasons why trade barriers are important.

Trade barriers are government-induced restrictions on international trade To protect domestic jobs from "cheap" labor abroad Protection from "dumping" To earn more revenue.

Which is the largest and shortest marketing channel? List at least two features of both these marketing channels

A direct channel is the simplest and shortest marketing channel Social media is the longest

What motivates agribusinesses to integrate or sign up for vertical integration? What are the motivations for farmers to sign up for contract farming?

Increase sales, eliminate costs, and improve profits by improving business operations. Income stability

Why do governments implement price floors and price ceilings?

It is usually done to protect buyers and suppliers or manage scarce resources during difficult economic times. Price ceiling- so the price is not super high that its unfair Price floor- to ensure that the market price of a commodity does not fall below a level that would threaten the financial existence of producers of the commodity

Do you think the meat supply chain was broken during the pandemic?

Meat and meat products' prices increased due to less production and increased demand because of panic buying. Whereas, later on, both meat production and demand were significantly decreased due to lockdown restrictions and lower purchasing power of the consumers that results in a decrease in meat prices

What are the six types of psychographic consumers? Which type do your targeted consumers belong to? Why?

Personality, lifestyle, social status, activities, interests, opinions, and attitudes.

What is Maslow's hierarchy of needs? Give an example of each

Physiological needs: Examples include air, food, water, shelter, clothing, warmth, sex and sleep. Safety needs: Examples include protection from elements, security, order, law and stability. Love and belongingness needs: Examples include friendship, intimacy, trust, acceptance, receiving and giving affection and love. Esteem needs: Self-esteem Self-actualization needs: Examples include realizing personal potential, self-fulfillment and seeking personal growth and peak experiences.

What are the seven stages of the marketing channel or supply chain stages?

Purchasing, Manufacturing, Inventory Management, Demand Planning, Warehousing, Transportation, and Customer Service

Summarize the following articles. "Do big cows brings big profits?" "The Rise of the Ghosts - The Impact of the Pandemic on food purchases" "Impacts of COVID-19 on Food Banks" "The invisible elephant: Dis-adoption of conservation practices in the United States" "Wildfires and smoke exposure create contracting and crop insurance challenges for California's wine industry."

SEE ASSIGNMENT 4

What is the fallacy of composition?

Assuming what is true of a part, is also true of the whole

What are the four criteria for effective market segmentation?

Substantiality, identifiability, accessibility, and responsiveness.

What are the five stages of consumer decision-making?

The 5 steps are problem recognition, information search, alternatives evaluation, purchase decision and post-purchase evaluation.

What are the three conditions for a brand's success? What are two types of brands? Give examples of each

Vision statement—What do you want to achieve? What are your core values? ... Value proposition—What value does your organization provide to customers that no one else can? ... Positioning statement—How do you want to be perceived in the marketplace?

What are two different types of risks agricultural producers face? Explain. What is a spot price and futures price?

Weather, disease, pests, and other factors affect both the quantity and quality of commodities produced. The spot price of a commodity is the current cash cost of it for immediate purchase and delivery. The futures price locks in the cost of the commodity that will be delivered at some point other than the present—usually, some months hence.

Is the beef sector in the US concentrated by a few companies?

Yes, 4 companies slaughtered about 85% of U.S. grain-fattened cattle that are made into steaks, beef roasts and other cuts of meat for consumers.

What is vertical integration? Which agricultural industry is highly vertically integrated? How does vertical integration impact the producers, supply chain, and consumers?

a business strategy in which a company takes ownership of two or more key stages of its supply chain Broiler Industry lower transportation costs, smaller turnaround times, or simpler logistics if the entire process is managed in-house. This may also result in higher quality products as the company has direct control over the raw materials used through the manufacturing line.

What are the factors that can impact international markets? State and explain five factors.

culture, language, political and legal systems, economic systems, and infrastructure.

What are the four market segmentations? Which one do you use for your business plan and why?

demographic, psychographic, geographic and behavioral

What are the four stages of the product life cycle? What marketing strategies can you use to increase sales in each stage?

introduction, growth, maturity, and decline. Introduction: involves developing a market strategy, usually through an investment in advertising and marketing to make consumers aware of the product and its benefits. Growth: increase in production and the product becoming more widely available. Maturity: price and product differentiation becomes even more important to maintain a market share. Decline: can be caused by new innovations.

What are the four groups of consumers? Explain with products that fall under each category.

omnivores, carnivores, herbivores and decomposers. Omnivores: A person that eats food of both plant and animal origin. Carnivores: An organism that mostly eats meat, or the flesh of animals. Herbivores: An animal that mainly eats plants Decomposers: An organism, especially a soil bacterium, fungus, or invertebrate, that decomposes organic material.

What are the five goals of marketing cooperatives?

to benefit members by helping them increase their margins, maintain control of their product to point of sale, and secure a reliable and consistent market for their goods

How is vertical integration different from vertical coordination?

vertical integration is the term used to describe a business strategy in which a company takes ownership of two or more key stages of its supply chain Vertical coordination is a superior authority coordinates his work with that of his subordinates and vice versa.