2009Exam1Key - AEC 305 (Fall 2009) Exam I (20%) Name _ 1....

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AEC 305 (Fall 2009) Exam I (20%) Name _________________________________________________ 1. Match the following approaches in analyzing agricultural markets (on the left) with its general description (on the right). (2 points each) ___ A ___ Institutional Approach A. analyzing the major marketing participants such as farmers, processors, retailers, and consumers ___ B ___ Functional Approach B. analyzing the major marketing activities such as transporting, processing, storing, and financing ___ C ___ Behavioral Approach C. analyzing the performance of a market such as the effectiveness of advertising or the equity in the distribution of profits 2. Identify two items that agricultural producers (farmers) desire from the ag marketing system AND two items that consumers want from the food marketing system. (2 points each) ± Producers --“Fair” (high) prices, market information, availability of inputs, access to markets, ability to add value , respect ± Consumers -- “Fair” (low) prices, abundant supplies at all times of the year, variety of products/product forms/sizes, convenience, quality/fresh, safe/nutritious/ payment options 3. You have been asked by President Todd to construct an index to determine how prices of goods and services purchased by college students has changed over time as one piece of data in establishing tuition rates. Discuss how you would go about your task. (5 points) First one must determine the components such as entertainment, food, clothing, books, tuition, etc. Next one must determine the individual weights (relative importance) for each component and the time periods to collect prices and finally select a base year. 4. Today’s food marketing system is being impacted by the following terms: demographics , consolidation, market power, economies of size (scale) , and consumer sovereignty . Choose two of these five terms and write a statement for each one that applies to today’s food marketing system which reveals that you understand these terms. ( 5 points) Demographics – discuss how the aging population, growth in Hispanics, higher income consumers and other factors about the distribution of the food-consuming population is impacting the types of products/services offered in today’s food markets Consolidation – discuss how consolidation could enhance market power vs economies of size – impact on prices Market Power – ability to increase price above a competitively determine price Economies of Size – lower per unit costs evolve as firm increases in size Consumer Sovereignty – consumer dictates products/services through purchasing decisions 5. What does the Consumer Price Index measure? Identify two ways the CPI is used. (6 points)
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2009Exam1Key - AEC 305 (Fall 2009) Exam I (20%) Name _ 1....

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