AGEC 340 EXAM 2 QUESTIONS 100%
ANSWERED!!
Implicit - ANSWERThose costs for which there is no cash outlay
• Rent payments on land that a farmer owns
• Tax abatements to processing companies to attract them to build facilities in an
area
Explicit - ANSWERPayments made to suppliers of resources, such as land, labor,
materials, fuel, etc.
Four scarce resources (factors of production) - ANSWER1. Land
2. Labor
3. Capital
4. Management
Four scarce resources- Return
1. Land
2. Labor
3. Capital
4. Management - ANSWER1. Rent
2. Wages
3. Interest
4. Salary
Price elasticity of demand- Definition - ANSWERMeasures consumer response to
price changes
Income elasticity of demand- Definition - ANSWERMeasures the response of
quantity demanded to changes in income
Cross price elasticity of demand - ANSWERMeasures how the quantity demanded
for one product responds to a price change in a different product
Goal of the agribusiness manager - ANSWERMaximize the long-run profits of the
firm by satisfying customer's needs
Supply relationship - ANSWERA Direct relationship between price and quantity
Examples of Macroeconomic events that impact agribusiness - ANSWERInflation
Government policies
Interest rates
Unemployment
Tax rates
GDP (Gross Domestic Product)
Demand relationship - ANSWERAn Inverse price-quantity relationship to supply
ANSWERED!!
Implicit - ANSWERThose costs for which there is no cash outlay
• Rent payments on land that a farmer owns
• Tax abatements to processing companies to attract them to build facilities in an
area
Explicit - ANSWERPayments made to suppliers of resources, such as land, labor,
materials, fuel, etc.
Four scarce resources (factors of production) - ANSWER1. Land
2. Labor
3. Capital
4. Management
Four scarce resources- Return
1. Land
2. Labor
3. Capital
4. Management - ANSWER1. Rent
2. Wages
3. Interest
4. Salary
Price elasticity of demand- Definition - ANSWERMeasures consumer response to
price changes
Income elasticity of demand- Definition - ANSWERMeasures the response of
quantity demanded to changes in income
Cross price elasticity of demand - ANSWERMeasures how the quantity demanded
for one product responds to a price change in a different product
Goal of the agribusiness manager - ANSWERMaximize the long-run profits of the
firm by satisfying customer's needs
Supply relationship - ANSWERA Direct relationship between price and quantity
Examples of Macroeconomic events that impact agribusiness - ANSWERInflation
Government policies
Interest rates
Unemployment
Tax rates
GDP (Gross Domestic Product)
Demand relationship - ANSWERAn Inverse price-quantity relationship to supply
