Question

Provide the correct answer for the following questions An efficient price system 1. a. lowers marketing costs b. transmits consumer preferences to the farm level effectively c. is equivalent to equilibrium pricing d. all of the above 2 product of labour a. increasing; constant b. increasing ; decreasing A production function Q-300 +10K+5L exhibits - returns to scale and - marginal c. constant; constant d. decreasing; constant 3. The marketing functions can a. easily be eliminated b. can only occur once the product leaves the farm c. help keep farm prices low d. none of the above. A cartel is an example of 4. a. dominant price leadership -b. joint profit maximization c. markets providing higher incomes for consumers d. market behavior under competition Which of the following is not a facilitating function of the marketing system? 5. -a. standardization b. market intelligence c. processing d. risk bearing When a farmer sells sorrel directly to a consumer at a roadside stand 6. a. the farmer is providing marketing services b. the consumer gets a better deal because no marketing services are included in the price c. the farmer makes a lot more money because he gets the middleman's share of the price d. the farmer has a lot of market power because he now has a captive market The marketing system provides many functions. Which of the following is not a marketing function? 7. a. market intelligence b. transportation c. buying d. providing farm inputs

Answer 1

1) An efficient price system will be optimal and thus reduce marketing cost by effectively transmitting consumer preferences to firm level. Option d) is correct.

2) If we increase K and L by t times, Q' = 300 + 10(tK) + 5(tL) = 300 + t(10K + 5L) = FC + t * Original Q

As the power of t is 1, the function exhibits constant returns to scale. and <arginal productivity of labour is 5 which is constant. Thus Option c) is correct.

3) Option d) is correct.

4) In a cartel, two or more firms join together and maximises their joint profit. Option b) is correct.

5) Option c) is correct.

6) Option a) is correct.

7) Option d) is correct.