Agribusiness part three
1) What is food safety?
a. A system to prevent plastic from getting eaten.
b. A system made to increase food hazards.
c. A system to prevent and reduce food borne hazards.
d. A system to prevent food from being safe to eat.
2) Which of the following is not an advantage of a sole proprietorship?
a. Farmer directly receives all rewards of good management and labor.
b. Easily formed
c. Relatively few government regulations and restrictions.
d. The owner has limited liability for the business.
3) Diversification in the production of crops and/or livestock generally tends to:
a. Increased returns and decreased risks.
b. Decreased returns and decreased risks.
c. Increased returns and increased risks.
d. Decreased returns and increased risks.
4) Which of the following could reduce production risk?
a. Genetically modified crops
b. Crop insurance
c. Crop diversification
d. All of the above
5) Monopolistic competition markets and monopoly markets are both characterized by:
a. homogenous products
b. high barriers to entry
c. price searchers
d. many sellers
6) Which of the following is a disadvantage of a corporation?
a. Owners have unlimited liability.
b. No regulations for start-up.
c. Double taxation
d. Both a and c
7) Because Jack can produce milk at a lower opportunity cost than his neighbor Bob, Jack:
a. Will always make larger profit
b. Has the comparative advantage
c. Will never have net loss on operations
d. Must be smarter
8) SMART goals are:
a. Standard, Measurable, Attainable, Rigorous, and Trite
b. Specific, Moneymaking, Awesome, Related, and Tractable
c. Specific, Measurable, Attainable, Related, and Tractable
d. Specific, Moneymaking, Attainable, Rigorous, and Trite
9) Which type of costs change with the level of production?
a. Variable costs
b. Average variable costs
c. Total costs of production
d. All of the above
10) Which type of market is characterized by many sellers, price-takers, and homogenous products?
a. Perfect competition markets
b. Monopolistic competition markets
c. Oligolopy competition markets
d. Monopoly competition markets
11) For the Hill Family Farm, dairy feed is considered:
a. A fixed cost
b. An expense on the accural income statement
c. A current liability
d. None of the above
12) The difference between the local cash market price and the futures price is called:
a. Profit margin
b. Basis
c. Premium
d. Distance factor
Use the diagram below for questions 13-15.
a. A system to prevent plastic from getting eaten.
b. A system made to increase food hazards.
c. A system to prevent and reduce food borne hazards.
d. A system to prevent food from being safe to eat.
2) Which of the following is not an advantage of a sole proprietorship?
a. Farmer directly receives all rewards of good management and labor.
b. Easily formed
c. Relatively few government regulations and restrictions.
d. The owner has limited liability for the business.
3) Diversification in the production of crops and/or livestock generally tends to:
a. Increased returns and decreased risks.
b. Decreased returns and decreased risks.
c. Increased returns and increased risks.
d. Decreased returns and increased risks.
4) Which of the following could reduce production risk?
a. Genetically modified crops
b. Crop insurance
c. Crop diversification
d. All of the above
5) Monopolistic competition markets and monopoly markets are both characterized by:
a. homogenous products
b. high barriers to entry
c. price searchers
d. many sellers
6) Which of the following is a disadvantage of a corporation?
a. Owners have unlimited liability.
b. No regulations for start-up.
c. Double taxation
d. Both a and c
7) Because Jack can produce milk at a lower opportunity cost than his neighbor Bob, Jack:
a. Will always make larger profit
b. Has the comparative advantage
c. Will never have net loss on operations
d. Must be smarter
8) SMART goals are:
a. Standard, Measurable, Attainable, Rigorous, and Trite
b. Specific, Moneymaking, Awesome, Related, and Tractable
c. Specific, Measurable, Attainable, Related, and Tractable
d. Specific, Moneymaking, Attainable, Rigorous, and Trite
9) Which type of costs change with the level of production?
a. Variable costs
b. Average variable costs
c. Total costs of production
d. All of the above
10) Which type of market is characterized by many sellers, price-takers, and homogenous products?
a. Perfect competition markets
b. Monopolistic competition markets
c. Oligolopy competition markets
d. Monopoly competition markets
11) For the Hill Family Farm, dairy feed is considered:
a. A fixed cost
b. An expense on the accural income statement
c. A current liability
d. None of the above
12) The difference between the local cash market price and the futures price is called:
a. Profit margin
b. Basis
c. Premium
d. Distance factor
Use the diagram below for questions 13-15.
13) What is the equilibrium price for corn?
a. $8.00
b. $5.00
c. $6.00
d. $7.00
14) The supply of corn is:
a. relatively elastic
b. downward sloping
c. upward sloping
d. both a and b
15) Which of the following will occur at a market price of $6.00?
a. a surplus
b. equilibrium conditions
c. a shortage
d. more supply than demand
16) If Jack wants to avoid paying any taxes he should:
a. not make any money
b. not file taxes
c. lie to the IRS about his contact information
d. move to Bermuda in the winter
17) A mission statement is:
a. a list of objectives that must be accomplished to reach a goal
b. never useful for agricultural producers
c. a clear and concise statement describing the company’s purpose
d. a list of tasks to be accomplished on a daily basis
18) If hamburgers and hot dogs are substitute goods, an increase in the price of hamburgers will cause:
a. the demand for hot dogs to increase and the equilibrium price to decrease
b. the demand for hot dogs to decrease and the equilibrium price to decrease
c. the demand for hot dogs to decrease and the equilibrium price to increase
d. the demand for hot dogs to increase and the equilibrium price to increase
19) If Jack and Jill wanted to maximize profits they should:
a. produce where marginal revenue is equal to marginal cost
b. produce where total revenue is greater than total cost
c. produce where costs are minimized
d. produce at the maximum production point
20) Which of the following would be included on an accrual income statement but not on a cash
income statement?
a. fertilizer expenses
b. cash paid interest on operating loans
c. receipts for livestock sales
d. depreciation on machinery
21) Which of the following is a way to manage human risk:
a. create an employee handbook
b. properly train employees
c. clearly establish the roles of each member of the farm operation
d. all of the above
22) If George wanted to explore whether he should add a crop enterprise to the dairy farm, he should
complete a:
a. whole farm budget
b. enterprise budget
c. partial budget
d. family living budget
23) Principle payments on debt would be included directly on which financial statements?
a. balance sheet
b. accrual income statement
c. statement of cash flows
d. none of the above
24) Who is the current U.S. Secretary of Agriculture?
a. Kathleen Merrigan
b. Ed Schafer
c. Tom Vilsack
d. John Kerry
25) The Hill’s sell their milk to a local cheese processing plant. The milk price often varies from month to month and the Hills are looking into some options to try and better manage their price risk
in the future. They want to be able to benefit if prices increase, but don’t want to be hurt if milk
prices fall. Which of the following alternatives should they investigate?
a. storage until the cash market price increases
b. put options
c. futures contracts
d. none of the above
Answer Key
1. C
2. D
3. B
4. D
5. C
6. C
7. B
8. C
9. D
10. A
11. B
12. B
13. D
14. C
15. C
16. A
17. C
18. D
19. A
20. D
21. D
22. C
23. C
24. C
25. B
a. $8.00
b. $5.00
c. $6.00
d. $7.00
14) The supply of corn is:
a. relatively elastic
b. downward sloping
c. upward sloping
d. both a and b
15) Which of the following will occur at a market price of $6.00?
a. a surplus
b. equilibrium conditions
c. a shortage
d. more supply than demand
16) If Jack wants to avoid paying any taxes he should:
a. not make any money
b. not file taxes
c. lie to the IRS about his contact information
d. move to Bermuda in the winter
17) A mission statement is:
a. a list of objectives that must be accomplished to reach a goal
b. never useful for agricultural producers
c. a clear and concise statement describing the company’s purpose
d. a list of tasks to be accomplished on a daily basis
18) If hamburgers and hot dogs are substitute goods, an increase in the price of hamburgers will cause:
a. the demand for hot dogs to increase and the equilibrium price to decrease
b. the demand for hot dogs to decrease and the equilibrium price to decrease
c. the demand for hot dogs to decrease and the equilibrium price to increase
d. the demand for hot dogs to increase and the equilibrium price to increase
19) If Jack and Jill wanted to maximize profits they should:
a. produce where marginal revenue is equal to marginal cost
b. produce where total revenue is greater than total cost
c. produce where costs are minimized
d. produce at the maximum production point
20) Which of the following would be included on an accrual income statement but not on a cash
income statement?
a. fertilizer expenses
b. cash paid interest on operating loans
c. receipts for livestock sales
d. depreciation on machinery
21) Which of the following is a way to manage human risk:
a. create an employee handbook
b. properly train employees
c. clearly establish the roles of each member of the farm operation
d. all of the above
22) If George wanted to explore whether he should add a crop enterprise to the dairy farm, he should
complete a:
a. whole farm budget
b. enterprise budget
c. partial budget
d. family living budget
23) Principle payments on debt would be included directly on which financial statements?
a. balance sheet
b. accrual income statement
c. statement of cash flows
d. none of the above
24) Who is the current U.S. Secretary of Agriculture?
a. Kathleen Merrigan
b. Ed Schafer
c. Tom Vilsack
d. John Kerry
25) The Hill’s sell their milk to a local cheese processing plant. The milk price often varies from month to month and the Hills are looking into some options to try and better manage their price risk
in the future. They want to be able to benefit if prices increase, but don’t want to be hurt if milk
prices fall. Which of the following alternatives should they investigate?
a. storage until the cash market price increases
b. put options
c. futures contracts
d. none of the above
Answer Key
1. C
2. D
3. B
4. D
5. C
6. C
7. B
8. C
9. D
10. A
11. B
12. B
13. D
14. C
15. C
16. A
17. C
18. D
19. A
20. D
21. D
22. C
23. C
24. C
25. B