AGEC 440 Exam 1 Questions and
Answers Graded A+
Agribusiness - Correct answer-A number of interrelated subsectors which work
together formally and informally to produce goods and services
- a system!
Agribusiness is a ________ - Correct answer-System
Consumer sovereignty - Correct answer-the power of consumers to decide what
gets produced
Consumer sovereignty is a _____ - Correct answer-principle
Assumption of Consumer sovereignty - Correct answer-Consumer preferences are
well defined and have perfect knowledge
distinctive characteristics of agribusiness sector - Correct answer-1. Food is
intertwined with culture
2. uncertainty underlying biologic basis of crop and livestock production
3. political intervention across sub sectors and between nations (farm bill)
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, 4. Ag and food tech development
5. competitive structures
6. food is necessity
Food is ________ with _________ - Correct answer-intertwined; culture
Castle's Concern - Correct answer-Economic theory is sacrificing relevance for
abstract rigor
Maximizing choices assumes ______ and _______ knowledge - Correct answer-
full; complete
Goals of Agribusiness Management - Correct answer-- Focus on the decisions and
actions of the managers within the food and agribusiness sector
- To improve the performance of the firms decision makers and success
interrelated formally and informally - Correct answer-Agbusiness 3 terms
operating profit/invested capital - Correct answer-ROIC Formula
(Market Value Debt/Firm Market Value)(Cost of debt)+(Market value of
equity/Firm Market Value)(Cost of equity) - Correct answer-WACC Formula
RFR+Bj[E(Rm,t)-RFR] - Correct answer-Cost of Equity Formula
Firms systematic risk - Correct answer-Bj abbreviated meaning
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Answers Graded A+
Agribusiness - Correct answer-A number of interrelated subsectors which work
together formally and informally to produce goods and services
- a system!
Agribusiness is a ________ - Correct answer-System
Consumer sovereignty - Correct answer-the power of consumers to decide what
gets produced
Consumer sovereignty is a _____ - Correct answer-principle
Assumption of Consumer sovereignty - Correct answer-Consumer preferences are
well defined and have perfect knowledge
distinctive characteristics of agribusiness sector - Correct answer-1. Food is
intertwined with culture
2. uncertainty underlying biologic basis of crop and livestock production
3. political intervention across sub sectors and between nations (farm bill)
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, 4. Ag and food tech development
5. competitive structures
6. food is necessity
Food is ________ with _________ - Correct answer-intertwined; culture
Castle's Concern - Correct answer-Economic theory is sacrificing relevance for
abstract rigor
Maximizing choices assumes ______ and _______ knowledge - Correct answer-
full; complete
Goals of Agribusiness Management - Correct answer-- Focus on the decisions and
actions of the managers within the food and agribusiness sector
- To improve the performance of the firms decision makers and success
interrelated formally and informally - Correct answer-Agbusiness 3 terms
operating profit/invested capital - Correct answer-ROIC Formula
(Market Value Debt/Firm Market Value)(Cost of debt)+(Market value of
equity/Firm Market Value)(Cost of equity) - Correct answer-WACC Formula
RFR+Bj[E(Rm,t)-RFR] - Correct answer-Cost of Equity Formula
Firms systematic risk - Correct answer-Bj abbreviated meaning
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
