MGEC51H3 Study Guide - Midterm Guide: Earned Income Tax Credit, Negative Income Tax, Reservation Wage

AEC 316 - Agricultural Marketing
Homework Assignment 2: Chapter 2

Name:____________________ Date:____________________

Multiple choice questions.

There is only one correct answer in multiple choice questions. Please, mark the correct

answer. Each multiple choice question is worth 5 points.

1. A perfectly competitive firm’s demand curve equals its:

Marginal cost curve

Average variable cost curve

Average fixed cost curve

Average revenue curve

None of the above

2. A perfectly competitive firm maximizes profits by setting price equal to:

a. Marginal cost

b. Marginal revenue

c. Average revenue

d. Average total cost

e. Average variable cost

3. In order for a monopoly to continue to be a monopoly:

a. The marginal revenue curve must be downward sloping

b. There must be no close substitutes

c. Marginal revenue must equal marginal costs

d. Average total costs must be decreasing

e. None of the above

4. Marketing strategy which involves dividing a broad target market into subsets of consumers who have, or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them.

a. Brand name

b. Minor ingredients

c. Market segmentation

d. Product features

e. Packaging

5. What characteristic is indicative of oligopolies?

Low profits

Interdependence of firms

Many firms

Entry is blocked

None of the above

6. At an equilibrium price:

a.The self-interest of consumers is maximized

b.Supply equals demand

c.There is an upward pressure on price

d.There is a downward pressure on price

None of the above

7. When both supply and demand increase, equilibrium quantity will:

a.Decrease

b.Increase

Stay the same

Can’t say

None of the above

8. Elasticity is a concept that deals with:

a.Market structure

b.Market equilibrium

c.Perfect competition

d.Consumer and producer sensitivity to changes in prices and income

None of the above

9. A set of competing firms producing similar products or a commodity in a market is called a(n) ___ .

a.Branch

b.Competition

c.Channel

Industry

None of the above

10. A market structure where there is only one buyer of a specific product is called:

a.Monopsony

b.Monopoly

c.Oligopsony

Monopsonistic competition

None of the above

Essay question: 50 points

11. Use the agricultural commodity that you selected in Chapter 1 and choose one agribusiness that buys it. Investigate the agribusiness using the Internet and other resources, and then write an essay addressing all or as many as possible of the following aspects of the agribusiness:

Size

Sales

Scope of product line

Worth (if public)

Number of employees

Locations globally

Market structure

Industry sector

All your answers/discussion should be typed in one essay that is at least 15 lines long (using formal English, correct paragraph and sentence structure, and making sure your ideas flow well from one sentence to another) using Times New Roman, 12 point, double space and 1-inch margins all around. Before submitting the final essay, use the “Spelling & Grammar” function of the MS Word to correct grammar.

At the end of your essay, provide the full citation record in alphabetical order in your list of references. For examples, visit: http://www.saea.org/wp-content/uploads/2013/08/reference-style-sheet.pdf. Please, note that the list of references does not count toward the minimum required 15 lines. Include your references in the text as “(Smith, 2015)” when citing at the end of a sentence, or “According to Smith (2015)” when citing at the beginning of a sentence. For example,

Negative publicity is a key determinant affecting consumers’ buying decisions (Ahluwalia, Burnkrant, and Unnava, 2000).

According to Cawley and Rizzo (2005), pharmaceutical products in the same therapeutic class experienced negative spillover in terms of lost sales.

Note: Most of the future essay questions will build on this essay question and/or the one agricultural commodity that you choose. This means that if there is little information on the agricultural commodity that you have chosen for this essay question, you should consider choosing a more common agricultural commodity on which ample information is available. In addition, this course will require you to compile all your answers to the essay questions into one term paper to be submitted by the end of the course. This means that the more effort you put into answering essay questions now, the more material you will have accumulated for your term paper by the end of the semester.

TYPE YOUR ANSWER TO THE ESSAY QUESTION 11 BELOW USING AS MUCH SPACE AS YOU NEED. THEN, PRINT THE HOMEWORK ASSIGNMENT AND SUBMIT THE HARD COPY.

Let me introduce you to Arlene, Boyd, Charlie, and Danielle. They signed up for a course in managerial economics and they have decided to offer you advice on the right answers to questions. This will work as follows:

First, I give you a question or scenario where you have to decide on an answer. You read it.

Second, take a look at the four answers given by our four intrepid students. Each will offer analysis of the question or scenario.

Third, decide which analyst you think has given the best answer. Choose that answer as your own!

The best answer will get full points. Usually, other answers may receive partial credit, though not all of them!

With that in mind, here is your first scenario!

The Japanese Navy in World War II needed to send reinforcements from Rabaul to Lae. They had a choice. They could sail their troop ships around the island of New Britain on the north side, through the Bismarck Sea, or they could sail on the south side through the Solomon Sea. The American forces know this as well, and must decide whether to deploy scouts to the north (Bismarck Sea) or the south (Solomon Sea). The sailing takes three days either way, but there is rain on the north side of the island, so it would take a day for the Americans to find the fleet.

If the Americans scout north and Japan sails north, the Americans will spend a day finding the Japanese and will get two days of bombing. If the Americans scout south and the Japanese sail north, the Americans will lose a day and only get one day of bombing. The weather is clearer on the south. If the Japanese sail south and the Americans scout north, the Americans get two days of bombing since they lose a day. If the Americans scout south, however, they will get three days of bombing. What should the Japanese commander do? How about the American? Briefly explain.

Each of our analysts offers you an answer. Choose the one you think is best.

Question 3 options: