AgriBusiness

Farm
an establishment that has (or should have had) at least $1,000 of sales of agricultural products during the year

Producers Sector
those firms engaged in the production of raw food, fiber, and other agricultural products

Food Product Processors
buy ingredients and process them into the form in which they are ready for sale to the consumer

Food Industry
all firms engaged in the production, processing, and/or distribution of food, fiber, and other agricultural products

Commodities Processors
buy raw agricultural products that have not been processed and convert them into food ingredients

Vertical Integration
The combination of different businesses of different businesses at different stages of the production/ marketing sequence under a single management

Coordination
The communication system that conveys consumer wants to producers

Concentration
The dominance of an industry by a few firms, usually measured by the percentage of the total market owned by the largest four firms

Market Power
The ability of a firm or firms to control price and/ or quantity traded in a market because of the dominance of the firms in the market

Globalization
The expansion of firms across national boundaries

Concentration among processors is a concern because concentrated firms
gain market power

In terms of number of farms, non-family, corporate farms are what proportion of total farms in the United States?
2%

The average American farmer produces enough to feed approximately ________ people (both domestic and exports)
150

Which of the following is NOT one of the major sectors of the food industry?
the food sector

According to the U.S. Department of Agriculture, the number of farms in the United States is approximately
2 million

Macroeconomics
the study of the entire economy, including employment, inflation, international trade, and monetary issues

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 sellers

The study of the behavior of an individual firm is part of
microeconomics

Economics
the social science that deals with the allocation of resources among an unlimited number of competing alternative uses

Agricultural Economics
the social science that deals with the allocation of resources among those competing alternative uses found in the production, processing, distribution, and consumption of food and fiber

The market for beef in the U.S. is an example of allocation using the ________ system
price

The economic term used to describe the earnings forgone by attending college is
opportunity cost

In the language of economics, which of the following is a “resource”?
water,pick-up trucks,wheat,labor

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

Ceteris Paribus
a short had way of saying “let one economic variable change and see how another economic variable changes assuming everything else stays the same.”

Opportunity Cost
a measure of how much of an earning opportunity is foregone by using a resource in its current employment

Price Taker
potential buyers and sellers in a perfectly competitive market who face a “take it or leave it” situation

Marginal
an additional or incremental unit of something

Efficient
a general concept used in a variety of situations measuring output per unit of input. The higher the ratio the more efficient the process.

Decreasing Marginal Returns
As additional units of a variable input are used, output increases at an decreasing rate.

Increasing Returns to Scale
As the size of inputs increases, outputs increase by a proportionately greater amount

Decreasing Returns to Scale
As the size of inputs increases, outputs increase by a proportionately lesser amount

Negative Marginal Returns
As additional units of a variable input are used, output decreases.

Constant Return to Scale
As the size of inputs increases, outputs increase by the same amount

Law of Diminishing Marginal Product
as equal increments of the variable input are added to the fixed inputs, there will inevitably occur a decrease in the rate of increase of the total product.

Increasing Marginal Returns
As additional units of a variable input are used, output increases at an increasing rate.

Fixed Input
those inputs for which the use rate does not change as the level of output change

Short Run
a time period in which some factors of production are fixed

Long Run
a period of time in which all resources are variable.

Accounting Profit
the difference between revenue earned and expenses incurred

Variable Input
those inputs for which the use rate does change as the level of output changes.

Economic Profit
the difference between all revenue and all input costs, whether actually paid or not.

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