ABM 100 Final Exam

If the farm share of the food dollar is decreasing, then farming is becoming less profitable
False
Institutional wholesalers typically do not sell to food service retailers
False
Approximately 40% of all jobs in the U.S. are related to some aspect of the agri-food system
False
There is an increasing trend in both the Food Bill and the Food Marketing Bill
True
The farm share of the food dollar has been decreasing over time
True
Most food products go through ten to twelve changes of possession before they reach the final consumer
False
Holding everything else constant, if the farm price of milk doubles, then one would expect the retail price of ice cream to more than double
False
Value-added is the difference between the cost of goods purchased by a firm and the price for which the firm sells those enhanced goods
True
Fresh produce and dairy products are the most common sources of food borne illnesses
True
Despite its northern climate, Michigan is still able to grow many different commodities and is one of the most agriculturally diverse states in the U.S.
True
According to the ERS, the farm share of the food dollar has been less than 16 cents of the dollar since 2000
True
Less than 25% of the land in the U.S. is used to produce food and fiber
False
Processors tend to locate their facilities near agricultural production regions
True
Both the demand for food products and the supply of food products are relatively stable throughout the year
False
Over the next twenty years, dairy products are projected to be one of the food categories that experience a decrease in per capita consumption
True
There is an increasing trend in real (inflation adjusted) retail food prices
True
Increasing incomes are leading to more emphasis placed on products price and less emphasis placed on food quality attributes
False
Approximately 1 out of every 2 meals is consumed away from home
False
The U.S. food market is considered a “mature” market which means that growth in the food market will come from older Americans eating more food
False
There is very little quality variation in fruits and vegetables
False
HRI is a common acronym used in the agri food system to describe hotels, restaurants and institutions
True
Annual expenditures on food and alcohol in the U.S. are approximately $160 trillion
False
In general, a food item that is highly perishable, like milk or eggs, will likely have a larger farm share of the food dollar than one that is highly processed
True
On average, Americans spend less than 10% of their income on food
True
The share of food expenditures for meals consumed at home in approximately 33%
False
The average food product travels less than 1000 miles before it reaches the final consumer
False
If a new government regulation increases the cost of producing soybeans, then one would expect to see a new market equilibrium with a lower price and a higher quantity of soybeans being traded in the market
False
Increased globalization has led to an increase in the value of many U.S. raw agricultural commodities and food products
True
An increase in the price of apples will shift the supply curve for apples
False
The U.S. is the worlds largest exporter of wheat
True
Two players who are not involved with marketing in the agri-food system are the agricultural int supplier and the processor
False
Increase globalization in the agri-food system has led to an increase in the variety and availability of agricultural and food products in the U.S.
True
The U.S. exports as much as 50% of its agricultural production
False
In the future, there will be less emphasis placed on food quality attributes and more emphasis placed on price when purchasing food products in the U.S.
False
A salesperson who spends tine explaining the benefits if her product to her customers is adding time value
False
The food manufacturer primarily sells product to the processor
False
The EU-28 is one of the top four export destinations for U.S. agricultural products
False
Canada, Mexico, and China are all in the top four export destinations and import sources for U.S. agricultural and food exports
True
On average, the majority of the value added to a food product occurs after the product has left the farm
True
The primary customer of the agricultural input supplier is the food manufacturer
False
Farms are shifting away from production of homogenous commodities towards production of commodities with specific end-use attributes
True
If ice cream and popsicles are substitutes, one would expect that a decrease in the price of ice cream would cause the demand for popsicles to increase
False
A potential benefit to consumers of market concentration in the agri food system is that larger firms may be able exercise market power
False
Japan has typically been one of the top four export destinations for U.S. agricultural and food exports
True
Most farms in the U.S. are considered non-family farms
False
In the 20th century, labor was the primary driver of increased agricultural productivity at the farm level
False
The clustering of fruit production and processing in the Traverse Bay area is an example of market concentration in the agri-food system
False
Is a surplus exists in the market, then there is downward pressure on price
True
The goal of a hedger is to buy and sell high when trading in the commodity futures market
False
The laws of sup,y and demand do not apply to futures markets, since actual goods are not physically traded in futures markets
False
Price determination is the interaction of the broad forces of supply and demand which establish the market price level
True
In the movie Trading Places, the Duke Brothers lose money by hedging in the frozen orange juice concentrate futures market
False
A producer will always make more money if he or she hedges than if he or she did not hedge
False
Less than 5% of all futures contracts typically result in actual delivery
True
A person can sell a futures contact without being in physical possession of the commodity
True
When individuals who want to trade future deposits funds with a brokerage firm in a margin account, typically only 5% of the overall value of the trade must be deposited
True
Increase in agricultural output often lead to decrease in farm revenues because the demand for agricultural products is relatively inelastic
False
If the quantity demanded of hot dogs at the Breslin Center decrease by 2.5% when the price increases by 4%, then the elasticity of demand for hot dogs at the Breslin center is -1.6
False
Is the supply of a product increase and the demand for that product is elastic, the total revenue of the producers will decrease
False
If baby-boomers are more responsive to milk proc changes than college students, then it is likely that the elasticity of demand for milk is more elastic for baby-boomers than it is for college students
True
If the elasticity of demand for apples is equal to -0.50, then a 10% increase un the price of apples will result in a 5% decrease in the quantity demanded of apples
True
Starbucks estimates that the price elasticity for its coffee is -1.2. Therefore, if Starbucks decrease the price of its coffee by 10%, then the quantity demanded will increase by 12% and Starbucks total revenue will increase
True
Income elasticities are typically larger for necessities than they are for luxuries
False
Most food products have an income elasticity between 0 and +1.0
True
The more inelastic demand is, the smaller the change in price when supply changes
False
The more inelastic demand is, the larger the change in quantity when price changes
False
In general, the more substitutes a food product has, the smaller the elasticity of demand
False
In general, the greater a food products share is of the consumer budget, the greater the elasticity of demand for that product
True
The majority of the states in the U.S. place at least a small tax on food purchased for at-home consumption
False
A tax on one good will impact the demand for that good’s substitute
True
Taxation as a policy tool may be used to influence customer buying choices
True
Since Michigan does not have a state grocery tax on food, this means that food purchased at restaurants and bars is not taxed in Michigan
False
The U.S. food industry is one of the least regulated consumer products industries
False
Michigan has a general state sales tax of 6.0%
True
Futures markets allow price risk to be shifted from speculators to hedgers
False
The larger the income elasticity, the greater the shift in demand curve given a change in income
True
If the demand for orange juice is inelastic, then total revenue in the orange juice market will increase as prices decreases
False
Most food products have an income elasticity greater than 1.0
False
Most of the people who trade on the commodity futures market are speculators
True
In a cash market, pricing and product delivery occur at nearly the same time
True
Assuming no broker fees, if a speculator buys a wheat futures contract at 495’2 per bushel and later sells a wheat future contract at 465’0 per bushel, he/she had made a profit of $0.3020 cents per bushel
False
If a 10% increase in the price of green eggs leads to a 12% decrease in the quantity demanded of ham, then green eggs and hams are compliments
True
A speculator neither owns or intends to own the commodity in the futures contract
True
If the supply curve for fish is perfectly inelastic, then an increase in demand will result in an increase in the quantity traded in the market, but there will be no change in price
False
The size of movement along a demand curve caused by a shift in supply would be measured by the elasticity of supply
False
Assume that the cross-price elasticity of demand for bacon with respect to the price of eggs is -2.0. This implies that a 4% increase in the price of eggs will cause the quantity demanded of bacon to decrease by 8%
True
Futures markets allows farmers to receive the highest price possible for their crops
False
If the elasticity of demand for cheese is equal to -0.50. then a 5% increase n the price of cheese will result in an 10% decrease in the quantity demanded of cheese
False
If the short-run elasticity of supply for coffee is +.45, then it is possible that the long-run elasticity of supply for coffee could be +.75
True
The elasticity of demand for most food products is negative and elastic
False
Typically, 20-25% all trades made in the commodity futures market will result in actual delivery of the commodity
False
Futures markets are used by speculators to reduce price risk
False