Deck 3: Economics for Agribusiness Managers

Question 1

What are the two types of profit?

Answer 1

a. Accounting profit
b. Economic profit

Question 2

------------------------------- is the application of basic economic principles to decisions within the firm.

Answer 2

Microeconomics

Question 3

------------------------------- may be defined as the quantities that consumers are willing and able to buy in the market at different prices.

Answer 3

Demand

Question 4

Illustrate using the graph below a "change in demand."

Question 5

As producers and consumers meet in the marketplace, an equilibrium quantity and price is determined. The process is called -------------------------------.

Question 6

Explanations for the existence of profits in our market-oriented, capitalistic economy include:

A) Risk-taking
B) Control of scarce resources
C) Some people have access to information that is not widespread
D) All of the above

Question 7

Macroeconomics is the:

A) "Big picture" view of our economic system
B) Factors of production
C) Prime resources
D) Customer needs

Question 8

Major factor(s) that cause the demand curve to shift include:

A) Change in technology
B) Expectations
C) Weather
D) Number of suppliers

Question 9

If the price elasticity of demand is 1.3, the demand is:

A) Price elastic
B) Price inelastic
C) Unitary
D) Inferior

Question 10

If the cross price elasticity of demand is 1.9, the items are:

A) Complements
B) Substitutes
C) Independent
D) Price elastic

Question 11

If the income elasticity of demand is -0.5, the goods are:

A) Complements
B) Substitutes
C) Inferior
D) Normal

Question 12

What is not a factor of production?

A) Management
B) Elasticity
C) Land
D) Labor

Question 13

Economics is defined as the study of how scarce resources are combined to meet the needs of people in a society of unlimited wants.

Question 14

An implicit cost involves payments to suppliers of resources.

Question 15

A shortage occurs when a firm charges a price that is too high.

Question 16

If demand is price elastic, total revenue increases when price decreases.

Question 17

A cross-price elasticity of 1.0 indicates two goods can be classified as independent.