AGEC 3203 Exam 1

Pricing efficiency is less than perfect when pricing fails to:

Coordinate the buying and selling activities of farmers, marketing firms, and consumers Direct resources from lower to higher value uses Fully represent consumer preferences

Structure of the industry is determined by:

Degree of product differentiation Number and sizes of firms Conditions of entry

Which of the three forms of business organization is by far the most common in U.S. agriculture?

Individual proprietorships

Macromarketing looks at how the food system is:

Is organized Performs its economic tasks Performs its social tasks How the food system is changing over time

The three major characteristics of the outputs of agriculture are:

It is largely a raw material that will be further processed Compared to other products are both bulkier and more perishable The quality varies from year to year

Publicly held farm operations represented what percent of U.S. farms and acreage in 1992?

Less than 1%

The structure of U.S agriculture does not refer to the:

Location of farms

Much of agricultural production is highly seasonal. Which of the following developments are making more uniform levels of production possible?

Management Breeding Nutrition

The process by which firms and organizations develop and implement programs that assist in satisfying consumers and making a profit is known as _____.

Marketing management

A commonly held attitude that middlemen are not productive, and that they frequently exploit farmers and consumers is known as _____.

Middleman bias

This dramatic increase in agriculture productivity during this period was not the result of:

More sophisticated consumers

Micromarketing, or business management, looks at an individual decision maker that could be;

None of the above

The situation that occurs when costs of marketing are reduced without affecting the output side of the efficiency ratio is:

Operational efficiency

Marketing outputs include utilities that provide satisfaction to consumers. Which of the following is not a marketing output?

Packaging

Storage, transportation, and processing are the components of which function.

Physical function

Market conduct is the firms':

Price Product Promotional Strategies

Social Capital is:

Resources created by society for the benefit of all

Merchant middlemen are:

Retailers & wholesalers

Farmers cost of production is not affected by:

Shoe size

Farmers have limited influence in the marketplace and generally make fewer marketing decisions than others in the system because of their:

Size Numbers Competitive position

The general rule is _____ will perform the food marketing functions when their efficiency in doing so is greater than that of farmers and consumers.

Specialized food middlemen

Once a firm or organization develops beyond the single unit of manager-laborer, the problem of getting appropriate information to the managers and of transmitting their decisions into actions by other workers is known as what major type of problem in behavioral systems.

The communications system

In the behavioral systems approach four major types of problems of the firm or organization of firms are:

The input-output system The power system The communications system Adapting to internal and external change

Select the major type of problem in the behavioral system of a firm or organization of firms where no decisions are made that might weaken their positon in the food marketing industry.

The power system

Which of the following decisions can be included in the selling function?

The proper unit of sale The proper packages The best marketing channel The proper time and place to approach potential buyers

Product differentiation is when firms distinguish their products from their competitors by varying:

The quality The price The packaging The brand Offering services All of the above

Variations in aggregate farm output does not vary from year to year due to:

The won-loss record of the farmers favorite team

Which of the following resources is not a marketing input?

Time

Food processors and manufacturers specialize in adding which of the following to raw farm products:

Time Form Place Possession utility

Average farm size in acres of land is increasing while the total number of farms is decreasing in the U.S. (T/F)

True

Food marketing is defined as the performance of all business activities involved in the flow of food products and services from the point of initial agricultural production until they are in the hands of consumers. (T/F)

True

In the developed world, food output has generally grown more rapidly than the population, resulting in increased per capita food supplies and a higher standard of living. (T/F)

True

Many studies have found the average cost of farm production falls as small farms grow larger, but there is a point at which average costs do not fall further as farm size increases. (T/F)

True

Production is the creation of utility, the process of making useful goods and services. (T/F)

True

Retailer's purchase and merchandise food products to final consumers. (T/F)

True

The buying function is the seeking out the sources of supply, assembling the products, and performing the activities associated with purchase. (T/F)

True

The exchange functions are those activities involved in the transfer of title to goods. (T/F)

True

The food marketing system is called a system because it consists of interrelated component parts that contribute to overall firm, industry, and social goals. (T/F)

True

The input cost of marketing is the sum of all the prices of resources used in the marketing process. (T/F)

True

The input-output system is any activity that transforms resources into more valuable products. (T/F)

True

The physical functions are those activities that involve handling, movement, and physical change of the actual commodity. (T/F)

True

The processing function includes all activities that change the basic form of the product, such as converting live animals into meat, fresh peas into canned or frozen peas, and wheat into flour and finally into bread. (T/F)

True

The standardization function is the establishment and maintenance of measurements that may be measurements of quality and quantity. (T/F)

True

To many the superior bargaining power of the buyers of farm products as compared to that of farmers is the most serious farm marketing problem. (T/F)

True

Trade associations are facilitative organizations that gather, evaluate, and disseminate information to a particular group or trade. (T/F)

True

Two major types of activities that occur in the food marketing system are (1) the physical handling of, storage, processing, and transfer of raw and finished goods as they move from producers to consumers and (2) the exchange and price setting processes. (T/F)

True

What proportion of farmer's income comes from nonfarm wages and salaries or from off-farm businesses?

Two-thirds

Market performance questions do not include:

What are you doing after this exam?

Agent middlemen can be divided into two major groups' _____ and _____.

commission men; brokers

The functional approach does not include:

Bodily functions

From 1980 to 2000 the nation's output per unit of input increased by:

2 to 3%

How much of the nation's land is used to produce food and fiber?

46%

The average size farm in the United States is approximately:

500 acres

In 1990 one farmer could feed:

96 consumers

Conditions necessary for a market to exist do not include:

A lack of freedom of choice for producers and consumers

A market may be defined by:

A location A product A time An institutional level

In the behavioral systems approach four major types of problems of the firm or organization of firms, which problem is known as that of adapting to changing conditions?

Adapting to internal and external change

The food marketing system is composed of

Alternative product flows A variety of firms Numerous business activities

The rise of middlemen in such activities as storage, transportation, processing, and retailing are an example of _____ and _____.

Division of labor; specialization

The most frequently used measure of market performance in the food industry is:

Efficiency

The utility not created in the productive process are:

Electrical

Buying and selling are the components of which function.

Exchange function

Standardization, financing, risk bearing, and market intelligence are the components of which function.

Facilitating function

Agent middlemen do not take title to, but do own the products they handle. (T/F)

False

Macromarketing and micromarketing are two similar views of the food production sector. (T/F)

False

Macromarketing involves making decisions how, when, where, and what to buy and sell. (T/F)

False

Marketable Surplus is the production of less than is needed for personal consumption. (T/F)

False

The food industry's three components are not (1) the input sector, (2) the farm sector, and (3) the product market sector. (T/F)

False

The institutional approach considers the nature and character of the various middlemen and related agencies but not the arrangement and organization of the marketing activities. (T/F)

False

The market intelligence function does not include collecting, interpreting, and disseminating the large variety of data necessary to the operation of the food marketing processes. (T/F)

False

The storage function is primarily concerned with not making goods available at a desired time. (T/F)

False

Facilitative organizations, as a general rule, do not directly participate in marketing processes as:

Farmers

Efficiency ratios can be expressed in physical terms or in dollar terms. When dollar terms are used, the concept becomes a ratio of _____.

benefits to cost

The idea that all business and marketing activity is directed toward the satisfaction of consumers is known as the doctrine of _____.

consumer sovereignty

Prices paid by farmers for purchased inputs increased faster than the prices they received from 1970 to 1994 contributing to the familiar _____ in agriculture.

cost-price squeeze

Food wholesalers sell to retailers, other wholesalers, and industrial users, but do not sell in significant amounts to _____.

final consumers

When farmers attempt to organize to influence farm prices they are often plagued by the _____ problem.

free-rider

Speculative middlemen are not known as;

good guys

The firm's _____ is the firm's choices of target markets and marketing mix.

marketing strategy

The individuals or businesses that specialize in performing the various marketing functions involved in the purchase and sale of goods as they are moved from producer to consumers are _____.

middlemen

The financing function involves the use of _____ to carry on the various aspects of food marketing.

money

Each firm should concentrate its marketing efforts on its _____ market segments.

target

The transportation function is primarily concerned with making goods at the proper _____.

place

Speculative middlemen are those that buy and sell products with the major purpose of profiting from _____.

price movements

The food marketing system encompasses two major types of activities. One is concerned with the physical handling, storage, processing and transfer of raw materials as they move from _____. The other is concerned with the exchange and price-setting processes in the _____.

producers to consumers; market system

Accepting the possibility of a loss in the food marketing of a product is _____ function.

risk bearing

The functional approach attempts to answer the "what" in the question of "who does what" the institutional approach to marketing problems focuses attention on the _____.

who