64 terms

Agricultural Economics Test 1

terms from the book + quiz questions
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Food Industry
All firms, large and small, engaged in the production, processing, and/or distribution of food, fiber, and other agricultural products.
Farm Service Sector
Those firms that produce and distribute the goods and services that farmers (producers) buy as a part of their business activities.
Producers Sector
Those firms engaged in the production of raw food, fiber, and other agricultural products.
Processors Sector
Those firms that convert raw agricultural products into food products in the form that the consumer eventually buys.
Commodities Processors
Buy raw agricultural products that have not been processed and convert them into food ingredients. A flour miller who buys wheat and sells flour is an example.
Food Product Processors
Buy food ingredients and process them into the form where they are ready for sale to the consumer. For example, Hunt's buys tomatoes and vinegar and makes them into ketchup.
Food Service Distributors
Those firms that distribute food products from food product processors to away from home dining facilities.
Marketers Sector
The set of firms that distributes food products from processors to the final consumer when and where the consumer when and where the consumer wants it. That consumer may be a retail shopper or someone eating at an away from home dining facility
Farm Structure
The study and analysis of farm characteristics such as the physical and economic size of farms, ownership of farms, and characteristics of the farm manager and his or her family.
Farm
Defined by the U.S. Department of Agriculture as an establishment that has (or should have had) at least $1,000 of sales of agricultural products during the year.
Typology
A system developed by the USDA that classifies farms based on economic size and characteristics of the farm operator.
Concentration
The dominance of an industry by a few firms, usually measured by the percentage of the total market owned by the largest four (or any other number) firms.
Market Power
The ability of a firm or group of firms to control price and/ or quantity traded in a market because of the dominance of the firm(s) in the market.
Globalization
The expansion of firms across national boundaries.
Coordination
The communication system that conveys consumer wants to producers. Traditionally, prices were the primary means of communication. More recently management information systems have replaced prices.
Vertical Integration
The combination of different stages of the production/marketing sequence under a single management.
Biofuels
Alternatives to petroleum-based fuels produced from biological or plant-based feedstocks.
Ethanol
A biofuel form of alcohol that can be mixed with gasoline for use in automobiles.
Economics
The social silence that deals with the allocation of scarce resources among an unlimited number of competing alternative uses.
Agricultural Economics
The social science that deals with the allocation of scarce resources among those competing alternative uses found in the production, processing, distribution, and consumption of food and fiber.
Price System
An allocative system in which economic choices are based on prices.
Command System
An allocative system in which economic choices are made by some central administrative unit.
Efficient
A general economic concept used in a variety of situations measuring output per unit of input. The higher the ratio, the more efficient the process.
Microeconomics of Production
The economics of the individual producer or firm making management decisions.
Microeconomics of Consumption
The economics of the individual consumer making decisions about the allocation of the family budget.
Market
An interaction between potential buyers and potential sellers.
Price Taker
Potential buyers and potential sellers in a perfectly competitive market who face a "take-it-or-leave-it" decision at the prevailing market price.
Marketing
The study of the creation of value that occurs as a good moves from producer to consumer.
Agribusiness
Firms engaged in farm service marketing, agricultural production, food processing, food distribution, and consumption.
Macroeconomics
The study of the entire economy including employment, inflation, international trade, and monetary issues.
Economic Model
A conceptualization, based on assumptions, of how economic activity occurs.
Ceteris Paribus
A shorthand way of saying "let one economic variable (the cause) change and see how another economic variable (the effect) changes, assuming that everything else remains unchanged."
Opportunity Cost
A measure of how much of an earning opportunity is foregone by using a resource in its current employment. Used by economists to establish an economic value for those resources that do not have an expressed market price.
Diminishing Returns
As additional units of an economic variable are used, the additional impact of that variable will eventually increase at a decreasing rate.
Marginal
An additional or an incremental unit of something.
Correlation
Changes in two variables are related to one another in a predictable manner but not necessarily in a cause-effect manner.
Causation
There is a cause-effect relation between two variables. A change in one variable causes a change in the second variable.
Comparative Statics
A before-after comparison to determine the impact of some action.
Rate of Change
The amount of change in one variable caused by or associated with a unit change in another variable.
Slope
At any point on a curve, slope is equal to the ratio of rise (vertical change) to run (horizontal change); and it is equal to the rate of change of the relationship at that point.
Market
An interaction between potential buyers and potential sellers.
Perfect Competition
A market in which there are so many buyers and so many sellers that no one of them can influence the market by his or her actions.
Demand
The quantities of a good that buyers are wiling to purchase at a series of alternative prices, in a given market, during a given period of time, ceteris paribus.
Quantity Demanded
How much of a good or service a buyer is willing to purchase at a single, specified price, in a given market, at a given time, ceteris paribus.
Demand Schedule
A schedule identifying specific price-quantity combinations that exist in a demand relationship.
Supply
The quantities of a good that sellers are willing to offer at a series of alternative prices, in a given market, during a given period of time, ceteris paribus.
Quantity Supplied
How much of a good or service a seller is willing to offer at a single, specified price, in a given market, at a given time, ceteris paribus.
Supply Schedule
A schedule identifying specific price-quantity combinations that exist in a supply relationship.
Supply Curve
A two-dimensional graph illustrating a supply relationship.
Equilibrium Price
The single price at which the quantity supplied in a market is equal to the quantity demanded.
Demand/Supply Shift
A change in the demand/supply relationship caused by a change in one of the ceteris paribus conditions.
The economic term used to describe the earning forgone by attending college is
opportunity cost
Economics is the science of
allocations
If I eat less it won't hurt the economy, therefore if everyone eats less it won't hurt the economy. This statement is an example of
the fallacy of composition
The study of the behavior of an individual firm is part of
microeconomics
In order to establish a market, what is essential?
Potential buyers and potential sellers
When a local McDonald's manager hired a third counter worker her sales increased by 22%. When she hired a fourth counter worker, her sales increased by 12%. This is an example of
Diminishing returns
In the language of economics, marginal means
additional
what creates the need for an allocation system
scarcity
Which food industry sector is closest to the final food consumer
the marketer sector
According to the U.S. department of Agriculture, the number of farms in the U.S. is
2.2 million
In terms of number of farms, non-family, corporate farms are what proportion of total farms in the united states
2%
Concentration among processors is a concern because concentrated firms
gain market power and can manipulate price
The average American Farmer produces enough to feed approximately ___ people (both domestic and foreign)
200 (150 domestic, 50 foreign)