Reference no: EM132197730

Question: 1. Explain how the combination of consumer desire for utility maximization with the scarcity of available resources leads to competition in the marketplace and greater satisfaction for all members of society.

2. Identify the factors that influence consumer demand. Which ones cause a change in consumer demand? Which ones cause only movement along the demand schedule? Which is more important to a producer, a shift in demand or movement along a demand schedule? Explain?

3. Explain why an agribusiness manager of a fertilizer plant needs to pay attention to changes in consumer demand for turkey dinners with mashed potatoes.

4. How does an agribusiness manager gain higher profits if she knows whether the demand for her products is elastic or inelastic?

5. What does it mean to the manager of an agribusiness to learn that the income elasticity of his products is positive but less than one? How does this information influence the formulation of the firms marketing plan and marketing mix?

6. Since few substitute goods exist for food, why donâ€^TMt farmers raise their prices to increase their incomes?

7. Explain the concept of elasticity of demand. Explain how an agribusiness manager could use this information to maximize her firmâ€^TMs long-run profits.

8. Rank the seven factors that affect consumer demand. Explain your rankings.

9. Would the demand for farm land in this area be relatively inelastic or relatively elastic? State why.

10. Would the supply of farm land in this area be relatively inelastic or relatively elastic? State why.

11. Peaches and cream are complements. When the price of peaches falls, and the price of raw milk (used to make cream) rises, what happens in the demand market for cream?

12. Acme Inc. produces widgets that are used in the production of gadgets. The primary input into the production of widgets is labor. As more labor is added to the production line, the amount of widgets that can be produced per unit of labor declines. Eventually total output of widgets declines, as labor crowds out the production process. This is an example of_____________________ returns to scale.

13. Consider the production process for the Williamette Bicycle Company (WBC). The WBC is operating at a point on their production function that exhibits increasing returns. As a consultant to the firm, what would you recommend they do from this point?