AGEC Quiz 1 Study Guide 2026 | Complete Review, Practice Questions & Quiz
Prep
Agricultural Economics: - ANS ✔✔Applied social science with how HUMANS CHOOSE to use
technical knowledge and scarce productive resources such as land, labor, capitol, and
management to PRODUCE food and fiber and distribute it for consumption to society.
Economics: - ANS ✔✔Study of how PEOPLE AND SOCIETY end up CHOOSING to employ scare
productive resources that could have alternative uses to produce various commodities and
distribute them for consumption (now or in future) among various persons or groups within
society.
What are the differences between economics and agricultural economics? - ANS ✔✔AGEC is
applied and deals with production and consumption of food and fiber
Microeconomics: - ANS ✔✔-Deals with single decision making entities, such as firms, people, or
markets
Example of microeconomics? - ANS ✔✔Unemployment rate in BR
Macroeconomics: - ANS ✔✔Deals with the economic system as a whole
Example of macroeconomics? - ANS ✔✔Unemployment Rate
Agribusiness: - ANS ✔✔-Includes the sum total of all operations involved in the manufacture
and distribution of farm supplies. (production, storage, processing, distribution, etc)
Positive Economics: - ANS ✔✔Describes the relationship between cause and effect
-Has already happened
Example of Positive Economics: - ANS ✔✔Government HAS imposed 10% sales tax
Normative Economics: - ANS ✔✔Examining questions of what ought to be
-Setting a norm on how it should be
Example of Normative Economics: - ANS ✔✔Government SHOULD impose 2% sales tax
Scarcity: - ANS ✔✔-Dont have unlimited amounts of any resource, good, or service. People
don't make enough to satisfy all their wants. So must economize decision making.
-Sacrifice
Less Consumers= - ANS ✔✔More supply= lower price
, Example of when a service is scarce: - ANS ✔✔When we must give something up to get another
good or service
Without ________________ there would be no need to study economics: - ANS ✔✔Scarcity
Opportunity Cost: - ANS ✔✔-Cost associated with opportunities that are given up when a firms
resources are not put to their highest value use
-Have option to do two things, what happens when one is given up
Example of Opportunity Cost: - ANS ✔✔-Firm owns a building and therefore doesn't pay rent.
OC is the rent of utilizing the office space
-Be in class or outside. Give up notes by choosing outside
Management: - ANS ✔✔Process used to control or direct a situation
Five Basic Steps of Managerial Decisions: - ANS ✔✔1. Observe a problem and think about a
solution
2. Analyze with further obersvations
3. Make the decision
4. Take action
5. Accept responsibility
What does a good manager do? - ANS ✔✔Minimize, thereby maximizing profit
Is agriculture a homogenous sector/industry? - ANS ✔✔No; made up of small family farms,
large corporations, restaurants, etc
Family Farms: - ANS ✔✔The farm family constitutes the basic labor force
What are the three reasons family farms are incorporated? - ANS ✔✔1. Corporate form of
organization can be used to transfer farms at a lower cost
2. Employee benefits deductible for corporation, but not individual
3. Corporation can separate management from ownership to reduce liability
Vertical Coordination: - ANS ✔✔The linking of stages in the marketing and production of a
commodity in one decision entity.
-Different stages of production under one entity
Vertical integration: - ANS ✔✔Successive production stages and/or marketing are coordinated
within one farm
Prep
Agricultural Economics: - ANS ✔✔Applied social science with how HUMANS CHOOSE to use
technical knowledge and scarce productive resources such as land, labor, capitol, and
management to PRODUCE food and fiber and distribute it for consumption to society.
Economics: - ANS ✔✔Study of how PEOPLE AND SOCIETY end up CHOOSING to employ scare
productive resources that could have alternative uses to produce various commodities and
distribute them for consumption (now or in future) among various persons or groups within
society.
What are the differences between economics and agricultural economics? - ANS ✔✔AGEC is
applied and deals with production and consumption of food and fiber
Microeconomics: - ANS ✔✔-Deals with single decision making entities, such as firms, people, or
markets
Example of microeconomics? - ANS ✔✔Unemployment rate in BR
Macroeconomics: - ANS ✔✔Deals with the economic system as a whole
Example of macroeconomics? - ANS ✔✔Unemployment Rate
Agribusiness: - ANS ✔✔-Includes the sum total of all operations involved in the manufacture
and distribution of farm supplies. (production, storage, processing, distribution, etc)
Positive Economics: - ANS ✔✔Describes the relationship between cause and effect
-Has already happened
Example of Positive Economics: - ANS ✔✔Government HAS imposed 10% sales tax
Normative Economics: - ANS ✔✔Examining questions of what ought to be
-Setting a norm on how it should be
Example of Normative Economics: - ANS ✔✔Government SHOULD impose 2% sales tax
Scarcity: - ANS ✔✔-Dont have unlimited amounts of any resource, good, or service. People
don't make enough to satisfy all their wants. So must economize decision making.
-Sacrifice
Less Consumers= - ANS ✔✔More supply= lower price
, Example of when a service is scarce: - ANS ✔✔When we must give something up to get another
good or service
Without ________________ there would be no need to study economics: - ANS ✔✔Scarcity
Opportunity Cost: - ANS ✔✔-Cost associated with opportunities that are given up when a firms
resources are not put to their highest value use
-Have option to do two things, what happens when one is given up
Example of Opportunity Cost: - ANS ✔✔-Firm owns a building and therefore doesn't pay rent.
OC is the rent of utilizing the office space
-Be in class or outside. Give up notes by choosing outside
Management: - ANS ✔✔Process used to control or direct a situation
Five Basic Steps of Managerial Decisions: - ANS ✔✔1. Observe a problem and think about a
solution
2. Analyze with further obersvations
3. Make the decision
4. Take action
5. Accept responsibility
What does a good manager do? - ANS ✔✔Minimize, thereby maximizing profit
Is agriculture a homogenous sector/industry? - ANS ✔✔No; made up of small family farms,
large corporations, restaurants, etc
Family Farms: - ANS ✔✔The farm family constitutes the basic labor force
What are the three reasons family farms are incorporated? - ANS ✔✔1. Corporate form of
organization can be used to transfer farms at a lower cost
2. Employee benefits deductible for corporation, but not individual
3. Corporation can separate management from ownership to reduce liability
Vertical Coordination: - ANS ✔✔The linking of stages in the marketing and production of a
commodity in one decision entity.
-Different stages of production under one entity
Vertical integration: - ANS ✔✔Successive production stages and/or marketing are coordinated
within one farm
