AGEC 340 FINAL EXAM (LATEST 2025 UPDATE) EXAM QUESTIONS AND DETAILED ANSWERS| 100% VERIFIED CORRECT GRADE A+

AGEC 340 FINAL EXAM (LATEST 2025 UPDATE) EXAM QUESTIONS AND DETAILED ANSWERS| 100% VERIFIED CORRECT GRADE A+ “Four key functions of managment - CORRECT ANSWER Marketing, Financial, Supply Chain, and Human Resource mgmt" "Marketing management definition - CORRECT ANSWER the process by which products flow through the US food system from producer to final consumer" "Key aspects of Marketing managment - CORRECT ANSWER -understanding customer needs and effectively positioning and selling products and services in the marketplace. -requires selling, advertising, web page design, and pricing. -everything is focused on costumer needs and wants, quest for customer satisfaction." "Financial management key aspects - CORRECT ANSWER -Profit is the driver for agribusiness as they work to generate the greatest possible returns from their resources. -generating the data needed to make good decisions, using the tools of finance to make effective decisions, and managing the assets, liabilities, and owners' investments in the firm." "Which sector includes farms and ranches that produce the crop and livestock products that provide combined purchased inputs, natural resources, and managerial talent to produce crop and livestock products? - CORRECT ANSWER production sector, and every industry in the food system is impacted in some way by production agriculture" "------ the ---- defines a farm as "any place from which $1000 or more of --------- products were produced and ------ during a given-----" - CORRECT ANSWER FARM, USDA, agricultural, sold, year" "---- farm----- determined by prices of ---- products, production yields and farm production-------. Farm prices can be----- volatile, moving------ quickly in response to ----- yields or ------- - CORRECT ANSWER Net, income, farm, expenses, highly, upward, low, oversupplying" "planning process - CORRECT ANSWER -gather facts and info that have a bearing on the situation. -analyze the situation and what problems are involved -forecast future development (able to figure out a need) -set performance objectives, the benchmarks to achieve goals -develop alternative course of action and select the most suitable -develop a means of evaluating process, and readjust plan as process unfolds" "what represents the systematic classification and grouping of human and other resources in a manner consistent with the firm's goals? - CORRECT ANSWER Organizing" "what does an organizational chart show? - CORRECT ANSWER shows the formal organizational structure of a company." "in the division of labor- jobs are----- into------ and then assigned - CORRECT ANSWER broken, components" "In the chain of command- ---- between ------ and those they supervise - CORRECT ANSWER links, managers" "Bureaucracy- a ------ organization that has ------ systems and process - CORRECT ANSWER complex, multilayered" "Directing is ----- efforts of others toward ----- a common goal - CORRECT ANSWER guiding, achieving" "if Qs>Qd there is a - CORRECT ANSWER surplus" "if Qd>Qs there is a - CORRECT ANSWER shortage" "SHIFTS IN DEMAND change in number of ----- change in price of ----- change in price of ----- change in consumer ----- change in------ change in consumer tastes and ------- - CORRECT ANSWER consumers complements substitutes income expectations preferences" "SHIFTS IN SUPPLY change in ----- change in the price of ----- change in w----- changes in price of ------ subsidies or ----- number of ----- - CORRECT ANSWER technology inputs weather/nature other products that can be producesd taxes suppliers" "derived demand is the demand for most - CORRECT ANSWER agricultural goods" "---- elasticity of demand measures how quantity demanded responds to a change in ----- - CORRECT ANSWER Price, Price" "------ elasticity of demand measures the response of quantity demanded to changes in ------ - CORRECT ANSWER income, income" "----- --- elasticity of demand measures how the quantity demanded for one product ------- to a price ----- in a different product - CORRECT ANSWER cross price, response, change" "price elasticity of demand formula - CORRECT ANSWER % change in quantity demanded / % change in price" "midpoint formula and point elasticity formula of price elasticity of demand - CORRECT ANSWER (Q2-Q1). (p1+p2) --------- X. ----------- (p2-p1). (Q1+Q2) (Q2-Q1). (P1) --------- X. ------- (P2-P1). (Q1)" "Price elasticity of demand is greater than 1, demand is -----, if TR of price increases then TR -------, if TR of a price decreases then TR------- - CORRECT ANSWER elastic, decreases, increases" "price elasticity of demand is equal to 1, demand is --------, TR of price increases then TR ------, if TR of price decreases then TR------ - CORRECT ANSWER unit elastic, is unchanged, is unchanged" "price elasticity of demand is less than 1, then demand is -------, TR of price increases then TR------, if TR of price decreases then TR------ - CORRECT ANSWER inelastic, increases, decreases" "Income elasticity of demand is the ----- formula as price elasticity of demand. if there is a + coefficient then it is a ----- good, QD ----- as income ----- if there is a - coefficient it is a ----- good, QD ---- as income------ - CORRECT ANSWER same, normal, increases, increases, inferior, falls, increases" "cross price elasticity of demand midpoint formula - CORRECT ANSWER (Qx,2-Qx,1) (Py,1+Py,2) ------------- X. ----------- (Py,2-Py,1). (Qx,1+Qx,2) same ^ X (Py,1) I ------ PEF (qx,1)" "in a cross price elasticity of demand greater than 0 is a ----- equal to 0 is a ----- less than 0 is a ----- - CORRECT ANSWER substitute independent complement" "each individual partner- regardless of the percentage of capital contributed- has equal rights- and liabilities, unless stated otherwise in a partnership agreement. - CORRECT ANSWER general partnership" "one general partner has unlimited liability, and all other partners have limited liability - CORRECT ANSWER limited partnership" "every owner has limited liability, and LLP protects each partner from debts against the partnership and they are responsible for the actions of other partners. - CORRECT ANSWER limited liability partnership" "what are some advantages of Partnership - CORRECT ANSWER *easy to start- little expense *partners as individuals pay taxes only on the income generated from their share of the profits, with no business tax *control and management are concentrated among the partners" "what are some disadvantages of partnership - CORRECT ANSWER *each general partner has unlimited liability *taxed on income as a separate individual (can be an advantage or disadvantage) *lack of continuity and stability of a partnership *one very important consideration is the need for a careful drafted, written partnership agreement." "What are the top export markets for USA? - CORRECT ANSWER Canada, 25 billion China, 33billion and Mexico. 26billion" "what are some benefits of international business - CORRECT ANSWER -expand sales -take advantage of scale economics -capture the benefits of a global brand -reduce risks by diversifying across markets -lower costs pf production -access lower-costs raw materials through international sourcing -broaden access to credit -leverage experiences from operating in international markets into domestic markets" "what are the four international agribusiness trends? - CORRECT ANSWER -Growing population in the global market -U.s. agribusiness trade and investment growth -bulk commodities, high-value products -world trade organization" "growing population in the global market characteristics - CORRECT ANSWER -the FAO defines food security as the state of affairs, where everyone has access to healthy food. -predictions put the global population between 8and12 and billion in 2050 -little double that food demand will increase in the future" "US agribusiness trade and investment growth, characteristics - CORRECT ANSWER -US food industry is growing abroad -trade and investment are key factors responsible for the growth -US agricultural industry is dependent on the export market. -International trade is very DEPENDENT upon changes in policy competitive markets and characteristics of consumer food differ between developed and developing countries" "agricultural products that have received additional processing or require special handling or shipping. - CORRECT ANSWER high-value products ex. animals, fruits, veggies" "grains (wheat, corn, soybeans), cotton and tobaco - CORRECT ANSWER bulk commodities" "World Trade Organization (WTO) - CORRECT ANSWER political social and economic changes have occurred that changed the way of business that conducts to international business" "When was GATT developed? - CORRECT ANSWER 1947" "when was WTO formed? - CORRECT ANSWER 1995, GATT agreements were incorporated into WTO -they have 164 members and rules apply for more than 97% of international trade" "Challenges of international business - CORRECT ANSWER cultural differences exchange rate fluctuations accounting differences uncertainty of political and economic climate international law and property rights issues sanitary and phytosanitary regulations management challenges" "Cultural differences - CORRECT ANSWER sense of self &space, language, appearance, food, time, relationships, values and norms, beliefs, mental processes, and work habits" "exchange rate fluctuations - CORRECT ANSWER -exchange rate determine the worth of one's country currency relative to that of another country. - when value of dollar rises relative to other competitors's currencies, US good become more expensive, so less competitive" "Key functions of management - CORRECT ANSWER Marketing Financial Supply chain Human resources" "Marketing managment - CORRECT ANSWER Drive the actions of the company know your attendance" "financial management - CORRECT ANSWER generating the data needed to make a good decision" "activities in the marketing department - CORRECT ANSWER Selling Advertising Promotions Market research New product development Customer service Pricing" "Financial Managment tools - CORRECT ANSWER Budgeting Ratio analysis Financial Forecasting Breakeven analysis" "Supply chain management goals - CORRECT ANSWER Push for Quality Drive to lower costs Changes in the supply chain Be more efficient in meeting consumers demands" "Human resources focus - CORRECT ANSWER Organizational structure Finding and hiring people Compensation Evaluation of performance" "Unique Dimensions of Agribusiness* - CORRECT ANSWER Food as a product: Biological nature of production agriculture: Seasonality: Weather: Types of firms: Variety of market conditions: Rural ties: Government intervention:" "Is it cheaper to ship raw or finished product? - CORRECT ANSWER Finished/ processed" "Sectors the food system - CORRECT ANSWER Food sector Production Agriculture sector Input supply sector" "Sector of the food system - CORRECT ANSWER Food Sector Production Agriculture sector Input supply sector" "Attributes of an agribusiness manager - CORRECT ANSWER Technically knowledgeable about their product. Effective communicator Ability to motivate people Proficient in the technical skills of management. Is a leader and agent of change Strong understanding of the biological and institutional factors surrounding the production of food and fiber." "Management is... - CORRECT ANSWER The art and science of successfully pursuing desired results with the resources available to the organization" "The role of a manager - CORRECT ANSWER Provides the business with leadership. Responsible for management of the organization. Acts as a catalyst for change. Lives to make things happen." "Manager vs Leader - CORRECT ANSWER Manager: tells people what to do Leader: Motivates people to do something" "Efficient - CORRECT ANSWER Maximizes the long-run profits of the firm" "Effective - CORRECT ANSWER profitably satisfying the customers needs" "Four pincipels in Agribusiness Management - CORRECT ANSWER Planning Organizing Directing Controlling" "Planning - CORRECT ANSWER Action-oriented thinking about the future. • Forward thinking Develops alternative goals and objectives - knows the consequences of alternative action Focus on a target, goal, or end-point - Beginning with the end in mind" "Types of planning - CORRECT ANSWER Strategic Tactical Contingency" "Strategic planning - CORRECT ANSWER Develop courses of action for the longer term. Two to twenty-year horizon" "tactical planning - CORRECT ANSWER Short-term plans to support the strategic plan. a crucial part of implementing the strategic plan. Focused on tomorrow or next month or year" "Contingency planning - CORRECT ANSWER Develops alternative plans for various possible business conditions A part of the strtegic and tactical planning process prepares for the unexpected to happen" "Steps in the planning process - CORRECT ANSWER Gather facts and information Analyze the situation and identify what problem are involved Forecast change set goals Develop alernatives Evaluate results and adjust the plan" "3 ways that managers directs - CORRECT ANSWER Polices Procedures Practices" "Management by exception - CORRECT ANSWER Manager should NOT spend time on areas that are progressing according to plan They should focus on the areas that are not progressing as they should" "Macroeconomics elements - CORRECT ANSWER National income GDP Inflation Unemployment Interest rates" "Microeconomics elements - CORRECT ANSWER Land - Rent Labor - Wages Capital - Interest Management - Salary" ""Maximizing the long-run profits of the firm..." - CORRECT ANSWER Efficient" ""... by profitably satisfying customer's needs." - CORRECT ANSWER Effective" "Accounting Profits vs Economic Profits - CORRECT ANSWER Accounting: *measures the performance and success of a business. *measurable costs Economic: *examines the opportunity cost of alternatives uses for resources within a buisness *alt. profits - opp. cost=Economic profit" "Types of Costs - CORRECT ANSWER Explicit: measurable payments made to suppliers such as *land *labor *material *fuel ect. Implicit: Costs for which have no cash outlay." "reward for taking a risk - CORRECT ANSWER "profit is the reward for taking a risk"" "how do profits exist - CORRECT ANSWER Profits exist because some people have access to information that is not widespread business is managed more efficiently" "Supply - CORRECT ANSWER Quantity that the seller is willing and able to place on the market at different prices during a particular period. *a direct relationship between price and quantity*" "Factors that effect supply - CORRECT ANSWER Change in technology Change in price of product Weather Changes in the price of other produced products Taxes or subsidies subsidies to providers Number of suppliers" "Factors that shift demand - CORRECT ANSWER Income Tastes and preferences Expectations of buyers Number of buyers Price of substitutes or complements products Seasonality" "Derived Demand - CORRECT ANSWER Based on need for a product that indirectly relates to consumer demand. ex.) the demand for wheat goes up when bread sales go up! ex.) demand for corn goes up, demand for fertilizer goes up" "Elasticity of demand - CORRECT ANSWER Predicts how consumers will respond to change in price, income, or prices of other goods" "Types of demand elasticity - CORRECT ANSWER Price elasticity Income elasticity cross price elasticity" "Price elasticity of demand - CORRECT ANSWER Measures consumers response to change in prices" "Income elasticity of demand - CORRECT ANSWER Measures the response of quantity demanded to change in income" "cross price elasticity of demand - CORRECT ANSWER Measures how the quantity demanded for one product responds to a price change in a different product" "Price elasticity equation - CORRECT ANSWER elasticity= %change in quantity demanded / %change in price" "Interpreting price elasticity of demand - CORRECT ANSWER Greater than 1.0: Elastic equal to 1.0: unit elastic Less than 1.0: inelastic" "Elastic price relations - CORRECT ANSWER price increases: Total revenue decreases Price decreases: Total revenue increases" "Unit elastic price relations - CORRECT ANSWER Price increases: Total revenue is unchanged Price decreases: Total revenue is unchanged" "Inelastic price relations - CORRECT ANSWER Price increases: Total revenue increases Price decreases: Total revenue decreases" "interpret cross price elasticity of demand - CORRECT ANSWER Demand < 0.0: Complement good Demand = 0.0: Independent good Demand > 0.0: Substitute good" "Things to consider when deciding on legal structure - CORRECT ANSWER *Ability to acquire resources (barrow money) *continuity of existence (will the buisness survive after a death) *liability of owners *Participation of management *transferability of owenership *record keeping *tax planning" "Thing to ask yourself when evaluating various legal structures - CORRECT ANSWER What type of business is it? where will business be conducted? what are the owners' objectives? how much start-up capital do you have? how much capital is needed? (know the concept, don't memorize)" "Factors to consider when evaluating various legal structures - CORRECT ANSWER Stability Continuity Transfer of ownership *How desirable is it to keep your affairs private?" "Sole Proprietorship - CORRECT ANSWER Most flexible legal structure The owner holds ALL the rights to the business Easiest legal structure to start and end Oldest and most widespread legal structure Owners personal assets can be taken to settle a business debt Business ends when when owner dies" "Partnership - CORRECT ANSWER A voluntary association of two or more people as co-owners of a business for profit. a partner can be a: person, coropration, or partnership the partnership may own some, all, or none of the assets used." "Uniform Partnership Act - CORRECT ANSWER What a partnership operates under when there is no written agreement" "Characteristics of a partnership - CORRECT ANSWER Each person involved participates in management decisions Assets are jointly owned Profits are shared Losses are shared joint bank account for the business Keep a single set of business records" "General vs Limited Partnerships - CORRECT ANSWER General: Have managerial decision-making authority Personally liable for all debts and obligations incurred by the partnership Limited: Have no decision-making authority Not responsible for payment of partnership debt beyond their financial investment" "Limited Liability Partnership (LLP) - CORRECT ANSWER A variation of the partnership Partners are not liable for debts charged to partnership due to the negligence, wrongful acts, or misconduct by another partner or other lawful representative." "Terminating a Partnership - CORRECT ANSWER Dissolution under a partnership usually takes place when the terms of business in the agreement is finished. if the duration is not fixed, any partner may terminate the partnership at will. (careful thought should be given to termination at the time the partnership is formed)" "Corporations - CORRECT ANSWER Like a living person A legal entity separate and distinct from the shareholders who own it. Has a life of its own and can go on in perpetuity It can enter into contracts, transact business, own property, sue, and be sued." "What separates a corporation from a partnership and sole proprietorship? - CORRECT ANSWER The concept of legal seperation" "Limited Liability Corporation (LLC) - CORRECT ANSWER If business is sued due to negligent acts commited by its office or employees, the shareholders is only risking the amount they invested Corporation is not liable for its shareholders' personal obligations Can be taxed as either a partnership or corporation, but most are taxed as a partnership." "Estate Planning - CORRECT ANSWER The act of preparing for the transfer of a person's wealth and assets after his or her death * major factor in developing small agribusiness corporations* It is easier to transfer shares of stock by gift or sale than to transfer bulk assets such as land, property, and equipment." "Subchapter C Corporation - CORRECT ANSWER The most common corporate legal structure Formed to conduct a commercial activity for profit ?????" "Subchapter S Corporations - CORRECT ANSWER Closely held corporation 100 or fewer stockholders ownership restricted to a defined class of people such as family members profits distributed like partnership. All shareholders must agree to accept this tax status (can avoid double taxation). *All shareholders are taxed at their personal rates, rather than the S-corporation being taxed directly" "Professional Corporations (PC) - CORRECT ANSWER Business corporations created to provide professional services that require a license. Such as: Physicians Dentists Law Firms Accounting services" "Cooperatives - CORRECT ANSWER Nonprofit corporations that exist to benifit their owners-users by allowing them to band together to buy and sell so they can lower their costs and increase revenue. provides services then turns and gives them profits at the end of the year" Six Component Industries of the Agri-Food system - CORRECT ANSWER Input Suppliers Producers Commodity Processors Food Manufacturers Food Distributors Food Retailers" "Input Suppliers - CORRECT ANSWER Prepare and sell things like feed, seed, fertilizer, and credit to farmers" "Producers - CORRECT ANSWER Produce agricultural commodities" "Commodity Processors - CORRECT ANSWER Process agricultural commodities" "Food manufacturers - CORRECT ANSWER manufacture prepared food products (ex Bakery)" "Food Distributors - CORRECT ANSWER Transport agricultural commodities and food products" "Food Retailers - CORRECT ANSWER Sell Agricultural commodities and food products to consumers" "Two New Sectors of Agriculture after Agricultural Revolution - CORRECT ANSWER Agricultural Input Supply Sector Commodity Processing/Food Manufacturing Sector" "Highest Level of Hierarchy according to Jean Kinsey - CORRECT ANSWER Status/Social Causes" "Lowest level of Hierarchy according to Jean Kinsey - CORRECT ANSWER Nutritious, Safe, Affordable" "Most all productivity gains on the farm have passed along to consumers in the form of - CORRECT ANSWER lower retail food prices" "Goal of every manager is to - CORRECT ANSWER maximize the long-run profits of the firm by profitably satisfying consumers needs" "Recipe for long-run business success - CORRECT ANSWER Efficiency, Effectiveness, Economic Well-Being" "Agribusiness managers can achieve the 3 E's when their firms are the first choice of their - CORRECT ANSWER Customers, Employees, Investors" "Four Functions of management - CORRECT ANSWER Planning Function Organizing Function Controlling Function Directing Function" "Planning Function - CORRECT ANSWER all activities that determine the future of a business" "Organizing Function - CORRECT ANSWER covers all the issues surrounding how to set up a business" "Controlling function - CORRECT ANSWER concerns giving management feedback on the firm's progress" "Directing function - CORRECT ANSWER is about the effective leadership of people" "Mission of marketing - CORRECT ANSWER bridge the gap between the conflicting needs of producers and consumers by completing the production process" "Five barriers to consumer satisfaction - CORRECT ANSWER Ownership Separation Time Separation Space Separation Value Separation Information Separation" "Ownership Separation - CORRECT ANSWER inability to transfer ownership" "time separation - CORRECT ANSWER product is not available when it is desired" "space separation - CORRECT ANSWER product is not where consumers need it" "value separtaion - CORRECT ANSWER product is not in the form consumers desire" "information separtation - CORRECT ANSWER lack of information about the product" "Marketing approach accept the idea of - CORRECT ANSWER consumer sovereignty" "Three prerequisites to an efficient economic system - CORRECT ANSWER a free market economy prices reflect the full value of resources a high degree of interaction between consumers and prodducers" "two criteria used to evaluate performance of a marketing system - CORRECT ANSWER efficiency fairness" "Four P's of marketing mix - CORRECT ANSWER product place price promotion" "mass marketing operates on the idea that - CORRECT ANSWER all consumers have the same needs" "target marketing operates on the idea that - CORRECT ANSWER consumers have different needs" "what allows managers to understand the current "health" of the firm, and to determine what actions to take to improve? - CORRECT ANSWER Financial information" "What is another way in which the financial agribusiness scene changes? - CORRECT ANSWER in the sourcing of funds" "three types of supply chain managment - CORRECT ANSWER supply chain mgmt operations mgmt logistics mgmt" "which management focuses on quality, lower costs, changes in the supply chain, and general pressures to be more efficient while providing the tools managers need to meet these operation and logistical challenges? - CORRECT ANSWER supply chain mgmt" "which management focuses on the direction and the control of the processes used to produce the goods and services that we buy and use each day through strategic use and movement of resources? and what are some of its issues? - CORRECT ANSWER operations management, some issues include scheduling, controlling, storing, and shipping." "which management involves the set of activities around storing and transporting goods and services? What are they trying on ways to lower costs? - CORRECT ANSWER Logistics management, shipping and inventory costs are huge, logistics mgmt is focusing on lowering them" "management is about - CORRECT ANSWER people" "human resource mgmt encompasses managing what two areas: - CORRECT ANSWER -the mechanics of the personnel administration, and -the finer points of motivating people to offer and contribute their maximum potential." "How to organize a firm, where to find people, how to hire them, and how to compensate them and how to evaluate them are issues to what mgmt? - CORRECT ANSWER human resource mgmt" "what 8 things make agriculture unique? - CORRECT ANSWER following 8 cards" "food is vital to the --------and----- of every------- . - CORRECT ANSWER health, survival, individual" "------nature of agriuclture product brings----- to ------- challenges - CORRECT ANSWER Biological, rise, unique" "-------affects both supply and ---- - CORRECT ANSWER Seasonality, demand" "-----uncertainty is a constant ----- for most ------- - CORRECT ANSWER wheater, threat, agribusiness" "there is a ------- variety across the types of ------ in the ------ and agribusiness sectors. - CORRECT ANSWER tremendous, business, food" "there is a ----- range of market----- and ------- - CORRECT ANSWER wide, conditions, structures" "ties to ----- towns and ---- areas - CORRECT ANSWER small, rural" "the ------- has a fundamental ----- in food and agribusiness - CORRECT ANSWER government, role" "The US food production and marketing system is divided into three sectors which are? AKA as? - CORRECT ANSWER input supply sector production sector food sector AKA as an agricultural supply chain" "which sector is made up of firms that manufacture and distribute the thousand of different inputs- products and services- to production agriculture? - CORRECT ANSWER input supply secotr" "what is among the enterprises which fall under the general category of input suppliers? - CORRECT ANSWER animal nutrition seed machinery and equipment fertilizer crop protection and credit and banking firms" "due to the products and services provided by the input supply sector, the productivity of the agricultural......... - CORRECT ANSWER .....production sector continues to increase" "the farm input supply sector is divided into what three areas? - CORRECT ANSWER manufacturing distribution services" "Manufacturing responsibilities and examples: - CORRECT ANSWER Input manufacturers are responsible for research, development, production, and manufacturing that make these products possible. EX. John Deere, syngenta, Zoetis and Bayer" "Distribution responsibilities and examples - CORRECT ANSWER input distributors are responsible for getting the products to form the manufacturer to the farm and providing a set of services that ensure the productive use of the inputs EX. individuals, companies, cooperatives" "Services and financing examples - CORRECT ANSWER farm management services, veterinary care, consulting business, and farm lending to name just a few of the types of business involved in this area" "The Economic Research Service (ERS) of the USDA classifies farms into what 4 groups? - CORRECT ANSWER small family farm (GCFI less than $350,000) midsize family farm (GCFI $350000 to $999,999) Large scale family ( GCFI $1,000000 or more) Non family farms" "At some point it all comes down to what? - CORRECT ANSWER to get raw farm commodities processed, packaged, distributed, and sold to the consumer (food sector)" "Food sector with ------- retailers and ----from----- food firms. Then wholesaling firms, food------ and ------ and assembly and ----- firms. - CORRECT ANSWER food, away, home, manufacturers, processors, transportation" "management is both and ----- and a ----- of successfully pursuing desired results with the resources available to their organization - CORRECT ANSWER art, science" "management requires technical knowledge about - CORRECT ANSWER the organization's product and function" "management requires good and - CORRECT ANSWER effective communicatiors" "management requires the ability to - CORRECT ANSWER motivate people" "management requires proficient in technical skills, like - CORRECT ANSWER accounting, finance and forecasting" "management requires strong understanding of - CORRECT ANSWER biological and institutional factors surrounding the production of food and fiber" "four key tasks of agribusiness managers. all effective agribusiness managers execute four principal tasks in their work. - CORRECT ANSWER planning organizing directing controlling" "what keeps the tasks going? - CORRECT ANSWER effective and timely communication heart and center" "what keeps the wheel turning? - CORRECT ANSWER Motivation" "planning can be defined as.. - CORRECT ANSWER forward-thinking about courses of action based on a full understanding of all factors involved and directed at specific goals and performance objectives" "what are the types of planning - CORRECT ANSWER strategic tactical & contingency planning" "Strategic planning - CORRECT ANSWER -develop courses of action for the longer term (2 to twenty yrs) -the first Step begins with a mission statement" "tactical planning - CORRECT ANSWER -focuses on short-term -tomorrow, next month, next year" "contingency planning - CORRECT ANSWER development of alternative, prepare for the unexpected" "strategic level - CORRECT ANSWER -executive mgmt -very flexible, long-term. written analysis, complex, detailed, broad" "tactical level - CORRECT ANSWER -middle mgmt -somewhat flexible, intermediate-term, written reports, less details, outlines, general" "contingency level - CORRECT ANSWER -line employees -inflexible, immediate, unwritten, simple, very specific" "directing is accomplished through - CORRECT ANSWER -selecting, allocating, and training personnel - staffing positions - assigning duties and responsibilities -establishing the results to be achieved -creating the desire for success -seeing that the jobe is done and done properly." "what does DIRECTING involve? - CORRECT ANSWER leading, supervising, motivating, delegating to, and evaluating those whom you manage" "Controlling represents -------- and ------ of activities. - CORRECT ANSWER monitoring, evaluation" "what does controlling measure? - CORRECT ANSWER -measures performance and compares against the standards and expectations they set -measures individual progress as well as the progress of entire departments and business" "Controlling plays a ----- role in determining the ----- or ----- of the business and allows for ----- interventions if standards are not being --- and warrant ------. - CORRECT ANSWER crucial, success, failure, earlier, met, investigation" "what is an important management technique? - CORRECT ANSWER managment by exception" "The idea is that managers should not spend ---- focusing on the "---", but rather focus on the areas that '----progressing well. is management by exception - CORRECT ANSWER time, good, aren't" "if sales are in line with the forecast, the manager can devote the bulk of their efforts to other areas, such as production, personnel, costs, and expansion is an example of? - CORRECT ANSWER management by exception" "Macroeconomics focuses on the ------- view of our economic system. - CORRECT ANSWER big picture. affects everybody. topics: national income, GDP, inflation, unemployment, and interest rates." "Microeconomics is the application of ------ principles to decisions within the firm - CORRECT ANSWER basic economics affects more of a business. (combining physical, human, and financial resources in the production and marketing of foods and services to meet customers' needs and generate a profit)." "what does economics study? - CORRECT ANSWER studies how individuals, firms, and society choose to combine scarce resources (land, labor, capital and management) to satisfy unlimited wants and best meet the needs of consumers" "a professional ----- understands and uses economic concepts to --- information, both to assess the broader ----- and to ---- the effectiveness of their ----. - CORRECT ANSWER manager, interpret, marketplace, improve, decision-making." "three economic concepts - CORRECT ANSWER -profit -economics of markets -economics of demand" "accounting profit is a ------ measure of firm-----. what is the formula? - CORRECT ANSWER performance, success AP= Total revenue- Total Measurable Costs" "Economic profit goes a step further to include the ------ of alternative uses for ------ within the firm. What is the formula? - CORRECT ANSWER opportunity cost, resources EP= Accounting profit- Opportunity cost" "Explicit costs are payments... - CORRECT ANSWER made to suppliers of resources (land, labor, materials, fuel) (CHECKS) -usually measured by an accountant." "Implicit costs are costs - CORRECT ANSWER for which there is no cash expenditure EX- rent payment on land that a farmer owns, tax abatements to new companies to attract them to build facilities in an area, we dont give ourselves checks to pay our own land." "the quantities that SELLERS are willing and able to place on the market at different prices during a particular time period is called a - CORRECT ANSWER supply" "the quantity that CONSUMERS are willing and able to buy in the market at various prices during a particular time period is called - CORRECT ANSWER demand" "law of ----- reflects a -----relationship betwee price and quantity, which means ------ are willing to provide ----- products for sale in the market as prices -----. - CORRECT ANSWER supply, direct, sellers, more, increases" "law of ------ finds an ----- relationship between price and quantity, or ---- are willing to purchasse----- as price ------. - CORRECT ANSWER demand, inverse, buyers, less, increases" "price discovery means that market equilibrium for Q & P is determined through.... - CORRECT ANSWER transactions between producers and consumers" "when quantity demanded is equal to quantity supplied it means that it is at - CORRECT ANSWER market equilibrium" "What are the 5 basic forms of business structures - CORRECT ANSWER Sole proprietorship. partnership corporation limited liability company cooperative" "factors influencing the choice of business what type of ---- is it? what are the owners ---&---? where is the business--- and ----? how much --- is available for the firm to ---? how much --- is needed to ---- agribusiness? how easy is it to ---- additional capital? what --- liabilities will be --- and what tax options are ---? - CORRECT ANSWER business objectives&philosophies located& conducted capital, startup capital, support secure tax, incurred, available" "more factors? what questions should you ask yourself - CORRECT ANSWER *how much personal involvement in the mgmt and control of the agribusiness do the owners desire? *How important are the factors of stability, continuity, and transfer of ownership to the firms' owners? *how desirable is it to keep the affairs of the agribusiness private, and carefully guard any public disclosure? *how much risk and liability are the owners willing to assume? *how. much will this form of org cost and how easy is this form of agribusiness to organize?" "What is the oldest and simplest form of business organization? - CORRECT ANSWER sole proprietorship" "how many individuals control the sole proprietorship and how popular is it? - CORRECT ANSWER one person or family it is the most famous in the US" "what are some advantages of a sole proprietorship? *----legal requirements, register the business name, purchase a license if one is required *----- is the boss, decisions can be made more ---- than when more than --- is involved *a sole proprietor pays --- income tax as a ---- business entity *----conduct business in any of the 50 states, ----- special permission other than whatever license are required for that particular kind of business - CORRECT ANSWER minimal owner, quickly, one no, separate can, without" "Disadvantages of Sole Proprietorship *Who is liable for all debts and liabilities of the business, and what is it called? *what. is another disadvantage relating to capital? *what happens if there is a high business profit? *proprietorships can lack -----&--- - CORRECT ANSWER *The owner, has unlimited liability *That there is a limited amount of capital that one person can contribute * the owner gets a higher tax bracket *stability and continuity" "how many people are associated with this business? what are the 3 typer of partnerships - CORRECT ANSWER two or more people -general partnership -limited partnership -limited liability partnership" "a corporation is a and an important distinction.... - CORRECT ANSWER special legal entity endowed by law with the powers rights, liabilities, and duties of a person, referred to as an artificial person *important distinction* corporation itself owns the assets of the corporation" "types of a corporation - CORRECT ANSWER C,S,B, close, and nonprofit corporation" "a benefit corp, a different mission from C corp but same benefits - CORRECT ANSWER B corporation" "don't pay state or income tax, charity, religious, nonprofit, benefits public - CORRECT ANSWER nonprofit corporation" "if its going to be sold, it falls under 2 taxation, medium or higher risk company, needs to raise capital - CORRECT ANSWER C. corporation" "run by small group of shareholders - CORRECT ANSWER close corporation" "the special, big benefit, by allowing business to pass down, design to avoid double taxation (loopholes) - CORRECT ANSWER S Corporation" "what does forming a corporation requires? - CORRECT ANSWER -strict adherence to the laws of the state in which the business is formed -series of legal documents, then examined by the states dept -if legal formalities are in order, then a charter authorizing the applicants to do business as a corp is issued" "what are the legal documents needed to form a corp? - CORRECT ANSWER -articles of incorporation- set the basic purpose of corp and how to finance it - bylaws-specify rules like election of directors, duties, and procedures -stock certification- shares detailing amounts of the owners investments" "what are advantages of corporation? - CORRECT ANSWER -stockholders (owners) are not personally liable for the debts of the organization, in most cases not responsible for liabilities. (they can only lose the amount they have invested in the firm) - easier to transfer ownership -relatively each for them to raise large amounts of equity capital -perpetual in nature" "disadvantages of corporation - CORRECT ANSWER -double taxation -many states impose special levies and taxes on corps -many more laws and regulations controlling the activities of corporations compared to other organizational firms -high costs of taxes, records, and operations. -lack of privacy -stockholders have little, if any, control over management and policies" "a type of business organization form that closely resembles a partnership, but provides its member's limited liability what happens to the net income generated by an LLC? - CORRECT ANSWER limited liability company LLC -it os passed on to its members in proportion to their shares of ownership" "advantages of LLCs - CORRECT ANSWER -can include any number of members -net income is reported on members' individual tax returns and taxes are paid by the members. -not required to file articles of incorporation (it can be a good choice for owners with significant personal assets they want protected)" "disadvantage of LLCs - CORRECT ANSWER -cannot deduct the cost of employees' benefits (insurance costs and the use of vehicles by members) -does not automatically continue" "Cooperative characteristics - CORRECT ANSWER -member-owned, member-controlled- fundamental principle, member control executed through a board of directors -operation at a cost- a cooperative's net income is distributed to individual members in proportion to the volume of the business that they have done. -limited returns on capital- many state cooperative laws require that returns on invested capital be limited" "cooperative advantages - CORRECT ANSWER -allow agricultural producers to level the playing field, by working together -capper-volstead act oof 1922 exempts co-ops from antitrust legislation: farmers are allowed to work together or collude and purchase their farm products- -provide a needed market where non existed before" "disadvantages of cooperative - CORRECT ANSWER -farmer members have a low voice in the business -biased election of the board of directors -only one vote on issues for each member regardles of shares scale" "how to deal with exchange rate fluctations - CORRECT ANSWER -accept payments in foreign currency since exporters can more effectively manage the risk -negotiate payment in another's currency that is relatively stable -divide the gains/losses in the exchange market -use the future market to manage risk using currency futures" "Accounting differences - CORRECT ANSWER -different accounting methods are used in each country -financial statement format varies from one country to another -research and development expendityres are also accounted for differenlty between countries." "uncertainty of political and economic climate - CORRECT ANSWER -agribusiness managers must be cautious about this -agbuisness firms could fall victim to a trade war between countries. trade protections by one country can lead to countermeasures from another -an economic depression caused by unexpected events can also negatively impact international business" "international law and property right issues - CORRECT ANSWER -the AGB must understand the legal systems of the operated countries -most important legal issue is the interpretation and enforcement of various regional trade agreements. (NAFTA, WTO, EU,ASEAN,AEPC) -most countries protect intellectual property rights, such as trademarks patents and publications -private property and its protection is another important international legal issue" "Sanitary and phystosanitary regulations - CORRECT ANSWER -SPS regulations are intended to protect human, animal and plant life. issues related to pests and pathogens -FAO/HWO, codex alimntarius commission for food, the international animal health orh for animal health, and FAO's secretariat of the international plant protection convention for plant health, they work to ptokmote and address SPS related to food additives, pesticide residues, animal and plant health" "managment challenges - CORRECT ANSWER -different language, distance, culture, gov, monetary systems constitute this challenge -political and economic uncerainties can be part of a manager's moset challenging problems as well. -mgmt issues become intensified when put into the international arena" "modes of entry - CORRECT ANSWER exporting, licensing, foreign production" "uses a trading company or an export management company to handle the logistics of exporting - CORRECT ANSWER indirect exporting" "company handles exporting, direct exporting, establishes contacts, and networks - CORRECT ANSWER direct esporting" "advantages of exporting - CORRECT ANSWER lower risk, lower fixed costs, and increased speed in reaching the global market" "disadvantages of exporting - CORRECT ANSWER managing the trade barriers or protectionism that may exist in a country, long distribution channels, less control over pricing, distribution, promotion and quality" "licensing - CORRECT ANSWER involves contracting with a firm (licensee) in the target market to produce and distribute the firm's (licensor) product" "advantages of licensing - CORRECT ANSWER little capital is required by licensor" "disadvantages of licensing - CORRECT ANSWER may entail giving sectret product formulas or processing technologies to the licensee, the licensee could become a competitior, the licensor could find its brand image hurt if the licensee does nor maintain sufficient control over the product quality or promotion" "foreign production/ direct investment GREENFIELD investment is... - CORRECT ANSWER a driect investments by. afirm into a particular country" "foreign production/ direct investment JOINT VENTURE IS.. - CORRECT ANSWER a form of strategic alliance that involves two or more firms that share resources in research, production, marketing or financing, as well as costs and risks" "foreign production/ direct investment ACQUISITION is... - CORRECT ANSWER purchasing a firm or a controlling interest in a firm" "choose exporting when.. - CORRECT ANSWER -financial resources are small -little experience in the new market -barriers of trade for a product do not exist - target market is small -growth potential is limited -barrriers to investment and ownership exist -control of market is unimportant -globalization is not a high business priority -foreign market is unstable -foreign market is culturally "distant"" "choose investment when - CORRECT ANSWER -financial resources are large -experienced in the new market -high barriers to trade exist -target market is large -growth potential is high -barriers to investment or ownership does not exist -high desire for market control -firm's goals include an international presence -stable political and economic climate -market is culturally "similar"" Every managers goal - CORRECT ANSWER Maximize the long-run profits of the firm by satisfying customer's needs"