AGEC 340 - EXAM 1 (TAMU) QUESTIONS WITH COMPLETE SOLUTIONS
“Key Functions of Management - CORRECT ANSWER marketing, financial, supply
chain, human resources"
"Marketing Management - CORRECT ANSWER The process of how products flow
through the U.S. food system from producer to final consumer. Key aspects include
understanding customer needs and effectively positioning and selling products and
services in the marketplace. Requires integration of several different activities: selling,
advertising, web page design, promotions, marketing research, new product development,
customer service, and pricing—all focused on customer needs, wants, and satisfaction."
"Financial Management - CORRECT ANSWER Profit is the driver for agribusinesses as
they work to generate the greatest possible returns from their resources. Key aspects
include generating the data needed to make good decisions, using the tools of finance to
make effective decisions, and managing the assets, liabilities, and owner's investment in the
firm."
"Food Sector - CORRECT ANSWER At some point, it all comes down to getting raw farm
commodities processed, packaged, distributed, and sold to the consumer. A very wide
variety of processing and marketing firms are responsible for adding value or utility to
commodities as they leave the farm gate."
"Management is both an ______ and a ______________ of successfully pursuing desire results
with the resources available to the organization. - CORRECT ANSWER art, science"
"Management requires - CORRECT ANSWER Technical knowledge about the
organization's product and/or function , Good and effective communicators, Ability to
motivate people, Proficient in technical skills, Strong understanding of industry"
"4 key aspects of management - CORRECT ANSWER planning, organizing, directing,
controlling"
"Manager - CORRECT ANSWER applies the technical skills of business to the
management of things"
"Leader - CORRECT ANSWER influences the attitudes and behavior of followers and
motivates them to do their best work"
1
,"Policies - CORRECT ANSWER are used to guide the thinking process during planning
and decision making."
"Procedures - CORRECT ANSWER are a step-by-step guide to implementing a policy for
a specific activity or function."
"Disadvantage 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 regardless of shares scale."
"A kkey point is to keep the focus on business planning - CORRECT ANSWER Focusing
on the future, succession."
"C Corporation - CORRECT ANSWER The most common type of corporation, which is a
legal business entity that offers limited liability to all of its owners, who are called
stockholders"
"S Corporation - CORRECT ANSWER A form of corporation that avoids double taxation
by having its income taxed as if it were a partnership"
"B corporation - CORRECT ANSWER A business that explicitly seeks to blend its social
objectives with its financial goals"
"Close Corporation - CORRECT ANSWER A corporation whose shareholders are limited
to a small group of persons, often family members."
"Nonprofit Corporation - CORRECT ANSWER a corporation that does not seek to earn a
profit"
"Benefits of international business - CORRECT ANSWER Expand sales, take advantage
of scale economies, Capture the benefits of a global brand, Reduce risk by diversifying
across markets, Lower costs of production, Access lower-cost raw materials through
international sourcing, Broaden access to credit, Leverage experiences from operating in
international markets into domestic markets"
"4 international trends - CORRECT ANSWER Growing population in the global market,
U.S. agribusiness trade and investment growth, Bulk commodities (high-value products),
World Trade Organization"
2
,"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"
"Accounting Profit - CORRECT ANSWER A performance measure of firm success •
Formula is = 𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 - 𝑇𝑜𝑡𝑎𝑙 𝑀𝑒𝑎𝑠𝑢𝑟𝑎𝑏𝑙𝑒 𝐶𝑜𝑠𝑡"
"Economic Profit - CORRECT ANSWER Includes the opportunity cost of alternative
uses for resources within the firm • Formula is = 𝐴𝑐𝑐𝑜𝑢𝑛𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 - 𝑂𝑝𝑝𝑜𝑟𝑡𝑢𝑛𝑖𝑡𝑦
𝐶𝑜𝑠𝑡"
"Explicit Costs - CORRECT ANSWER Payments made to suppliers of resources (land,
labor, materials, fuel, etc.); Usually measured by an accountant"
"Implicit Costs - CORRECT ANSWER Costs for which there is no cash expenditure
(foregone interest, foregone income, unrealized rent)"
"Supply - CORRECT ANSWER the quantities that sellers are willing and able to place on
the market at different prices during a particular time period."
"Law of Supply - CORRECT ANSWER a direct relationship between price and quantity,
which means sellers are willing to provide more products for sale in the market as prices
increase."
"Demand - CORRECT ANSWER quantity that consumers are willing and able to buy in
the market at various prices during a particular time period."
"Law of Demand - CORRECT ANSWER finds an inverse relationship between price and
quantity, or buyers are willing to purchase less as price increases."
"Process of price discovery - CORRECT ANSWER market equilibrium for quantity and
price is determined (or discovered) through transactions between producers and
consumers"
"Market equilibrium - CORRECT ANSWER the quantity demanded is equal to the
quantity supplied."
3
, "Surplus - CORRECT ANSWER When there is more quantity supplied than there is
quantity demanded"
"Shortage - CORRECT ANSWER When there is more quantity demanded than there is
quantity supplied"
"Cross price elasticity of demand - CORRECT ANSWER Measures how the quantity
demanded for one product responds to a price change in a different product"
"Cross price elasticity equation - CORRECT ANSWER % change in quantity demanded
for good X ÷ % change in price of good Y"
"Midpoint Cross Price Elasticity Formula - CORRECT ANSWER (Qx2-Qx1) ÷ (Py2-Py1)
x (Py1+Py2) ÷ (Qx1+Qx2)"
"Point Cross Price Elasticity Formula - CORRECT ANSWER (Qx2-Qx1) ÷ (Py2-Py1) x
(Py1 ÷ Qx1)"
"If the Cross Price Elasticity of Demand Coefficient is LESS THAN (<) 0 - CORRECT
ANSWER Substitute"
"If the Cross Price Elasticity of Demand Coefficient is GREATER THAN (>) 0 - CORRECT
ANSWER Independent"
"If the Cross Price Elasticity of Demand Coefficient is EQUAL TO (=) 0 - CORRECT
ANSWER Complement"
"Market Clearing - CORRECT ANSWER When there is no excess supply or demand.
Supply equals demand."
What are the 4 key functions of management? - CORRECT ANSWER Marketing,
Financial, Supply Chain and Human Resource management."
"Explain Marketing Management? - CORRECT ANSWER The process in which products
flow from producer to consumer."
4
“Key Functions of Management - CORRECT ANSWER marketing, financial, supply
chain, human resources"
"Marketing Management - CORRECT ANSWER The process of how products flow
through the U.S. food system from producer to final consumer. Key aspects include
understanding customer needs and effectively positioning and selling products and
services in the marketplace. Requires integration of several different activities: selling,
advertising, web page design, promotions, marketing research, new product development,
customer service, and pricing—all focused on customer needs, wants, and satisfaction."
"Financial Management - CORRECT ANSWER Profit is the driver for agribusinesses as
they work to generate the greatest possible returns from their resources. Key aspects
include generating the data needed to make good decisions, using the tools of finance to
make effective decisions, and managing the assets, liabilities, and owner's investment in the
firm."
"Food Sector - CORRECT ANSWER At some point, it all comes down to getting raw farm
commodities processed, packaged, distributed, and sold to the consumer. A very wide
variety of processing and marketing firms are responsible for adding value or utility to
commodities as they leave the farm gate."
"Management is both an ______ and a ______________ of successfully pursuing desire results
with the resources available to the organization. - CORRECT ANSWER art, science"
"Management requires - CORRECT ANSWER Technical knowledge about the
organization's product and/or function , Good and effective communicators, Ability to
motivate people, Proficient in technical skills, Strong understanding of industry"
"4 key aspects of management - CORRECT ANSWER planning, organizing, directing,
controlling"
"Manager - CORRECT ANSWER applies the technical skills of business to the
management of things"
"Leader - CORRECT ANSWER influences the attitudes and behavior of followers and
motivates them to do their best work"
1
,"Policies - CORRECT ANSWER are used to guide the thinking process during planning
and decision making."
"Procedures - CORRECT ANSWER are a step-by-step guide to implementing a policy for
a specific activity or function."
"Disadvantage 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 regardless of shares scale."
"A kkey point is to keep the focus on business planning - CORRECT ANSWER Focusing
on the future, succession."
"C Corporation - CORRECT ANSWER The most common type of corporation, which is a
legal business entity that offers limited liability to all of its owners, who are called
stockholders"
"S Corporation - CORRECT ANSWER A form of corporation that avoids double taxation
by having its income taxed as if it were a partnership"
"B corporation - CORRECT ANSWER A business that explicitly seeks to blend its social
objectives with its financial goals"
"Close Corporation - CORRECT ANSWER A corporation whose shareholders are limited
to a small group of persons, often family members."
"Nonprofit Corporation - CORRECT ANSWER a corporation that does not seek to earn a
profit"
"Benefits of international business - CORRECT ANSWER Expand sales, take advantage
of scale economies, Capture the benefits of a global brand, Reduce risk by diversifying
across markets, Lower costs of production, Access lower-cost raw materials through
international sourcing, Broaden access to credit, Leverage experiences from operating in
international markets into domestic markets"
"4 international trends - CORRECT ANSWER Growing population in the global market,
U.S. agribusiness trade and investment growth, Bulk commodities (high-value products),
World Trade Organization"
2
,"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"
"Accounting Profit - CORRECT ANSWER A performance measure of firm success •
Formula is = 𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 - 𝑇𝑜𝑡𝑎𝑙 𝑀𝑒𝑎𝑠𝑢𝑟𝑎𝑏𝑙𝑒 𝐶𝑜𝑠𝑡"
"Economic Profit - CORRECT ANSWER Includes the opportunity cost of alternative
uses for resources within the firm • Formula is = 𝐴𝑐𝑐𝑜𝑢𝑛𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 - 𝑂𝑝𝑝𝑜𝑟𝑡𝑢𝑛𝑖𝑡𝑦
𝐶𝑜𝑠𝑡"
"Explicit Costs - CORRECT ANSWER Payments made to suppliers of resources (land,
labor, materials, fuel, etc.); Usually measured by an accountant"
"Implicit Costs - CORRECT ANSWER Costs for which there is no cash expenditure
(foregone interest, foregone income, unrealized rent)"
"Supply - CORRECT ANSWER the quantities that sellers are willing and able to place on
the market at different prices during a particular time period."
"Law of Supply - CORRECT ANSWER a direct relationship between price and quantity,
which means sellers are willing to provide more products for sale in the market as prices
increase."
"Demand - CORRECT ANSWER quantity that consumers are willing and able to buy in
the market at various prices during a particular time period."
"Law of Demand - CORRECT ANSWER finds an inverse relationship between price and
quantity, or buyers are willing to purchase less as price increases."
"Process of price discovery - CORRECT ANSWER market equilibrium for quantity and
price is determined (or discovered) through transactions between producers and
consumers"
"Market equilibrium - CORRECT ANSWER the quantity demanded is equal to the
quantity supplied."
3
, "Surplus - CORRECT ANSWER When there is more quantity supplied than there is
quantity demanded"
"Shortage - CORRECT ANSWER When there is more quantity demanded than there is
quantity supplied"
"Cross price elasticity of demand - CORRECT ANSWER Measures how the quantity
demanded for one product responds to a price change in a different product"
"Cross price elasticity equation - CORRECT ANSWER % change in quantity demanded
for good X ÷ % change in price of good Y"
"Midpoint Cross Price Elasticity Formula - CORRECT ANSWER (Qx2-Qx1) ÷ (Py2-Py1)
x (Py1+Py2) ÷ (Qx1+Qx2)"
"Point Cross Price Elasticity Formula - CORRECT ANSWER (Qx2-Qx1) ÷ (Py2-Py1) x
(Py1 ÷ Qx1)"
"If the Cross Price Elasticity of Demand Coefficient is LESS THAN (<) 0 - CORRECT
ANSWER Substitute"
"If the Cross Price Elasticity of Demand Coefficient is GREATER THAN (>) 0 - CORRECT
ANSWER Independent"
"If the Cross Price Elasticity of Demand Coefficient is EQUAL TO (=) 0 - CORRECT
ANSWER Complement"
"Market Clearing - CORRECT ANSWER When there is no excess supply or demand.
Supply equals demand."
What are the 4 key functions of management? - CORRECT ANSWER Marketing,
Financial, Supply Chain and Human Resource management."
"Explain Marketing Management? - CORRECT ANSWER The process in which products
flow from producer to consumer."
4
