AGRI ECONOMICS
SHORT QUESTIONS
1. Econometrics.
Social science in which the tools of economic theory, mathematics and statistical inference are applied to the analysis of economic phenomena.
2. Regression analysis.
It is concerned with the study of dependence of one variable, the dependent variable, on one or more other variables, the explanatory variables, with a view to estimating and predicting the (population) mean or average value of the former in terms of the known or fixed values of the latter.
3. Correlation analysis.
AGRI ECONOMICS
SHORT QUESTIONS
1. Econometrics.
Social science in which the tools of economic theory, mathematics and statistical inference are applied to the analysis of economic phenomena.
2. Regression analysis.
It is concerned with the study of dependence of one variable, the dependent variable, on one or more other variables, the explanatory variables, with a view to estimating and predicting the (population) mean or average value of the former in terms of the known or fixed values of the latter.
3. Correlation analysis.
Closely related to regression analysis but here the primary objective is to measure the strength or degree of linear association between the two variables
4. Co-efficient of determination.
In two or multiple regression R2 is a summary measure that tells how well the sample regression line fits the data.
5. Variation & variance.
Variations mean the sum of squares of the deviation of a variable from its mean value. Variance is this sum of squares divided by the appropriate degrees of freedom
Variation
Variance = ——————————– d. f
6. Regression through the origin,
Regression analysis in which the intercept term is absent or zero.
7. Marginal propensity to consume. (MPC)
The rate of change of consumption for a unit change in income is greater than zero but less than one.
8. Constant:
A symbol which during discussion keeps the same value is called constant. These are normally expressed by the first letters. e.g., a, b, c, etc.
9. Variable:
A symbol which during the discussion may assume different values. Normally expressed by the letters x, y, z.
10. Independent variable.
When the value of a variable is assumed in a given discussion, it is called an independent variable. e.g. we assume national income (Y)as an independent variable.
11. Market:
An aggregate composed of potential buyers and sellers that bring to focus the conditions and forces which determine prices.
12. Marketing.
It is total system of interacting business activities designed to plan, price , promote and distribute want satisfying goods and services to household consumers and industrial users.
13. Middlemen.
Middlemen are those individuals who specialize in performing the various marketing functions involved in the purchase and sale of goods as they are moved from producers to consumers. e.g. merchant middlemen, agent middlemen and speculative middlemen.
14. Marketable surplus.
The surplus produce which is theoretically available for disposal by the producer after meeting his genuine requirements for family consumption.
15. Marketed surplus.
Marketed surplus represents that portion of marketable surplus which is actually marketed and placed at the disposal of non-producers.
16. Percentage share of crops.(area wise)
Of the total cropped area of about 20 million ha, food grains account for about 56%, cash crops 16%, fodder crops 15%, pulses 7%, fruits & vegetables 3%, oil seeds 2%.
17. A centralized marketing channel.
The farmer’s produce is brought in large central markets. There they are purchased by processors or wholesalers from commission men who act as the farmer’s selling agents. e.g. our normal (traditional )commodities channel.
18. A decentralized marketing channel.
It does not utilize established large market facilities. Instead processors or other wholesalers purchase either directly from the farmers or at small production areas selling points. e.g. PASSCO, sugar mills etc.
19. Marketing channels.
A channel of distribution consists of specialized marketing institutions that are related to each other as buyers and sellers. It is a pipeline for the flow of goods from manufacturers or producers to consumers and plays an important role in structuring agencies in marketing process.
20. Market integration.
Grouping additional agencies or functions under one management.
21. Marketing boards.
Public bodies set up by Govt. action and delegated legal powers of compulsion over producers and handlers of primary or processed agricultural products.
22. Marketing efficiency.
Any change that reduces the input cost of performing a particular marketing service, without reducing consumer satisfaction with the output of goods & services.
23. Economic efficiency.
Manner in which markets create and transmit signals to buyers and sellers on how to allocate resources.
24. Technical efficiency.
It is concerned with the effectiveness with which the physical functions of marketing are carried out.
25. Marketing margins.
A difference between the price paid by consumers and that obtained by producers.
26. Support price.
It is the minimum but guaranteed price for the growers during the post harvest period. It is not meant to replace the market system but to correct the shortcomings and failures of market system.
27. Organization.
Organization means bringing together various factors of production in order to carry out the process of production more successfully.
28. Individual entrepreneur.
The single individual owns and controls the business organization and bears all the risks. The single entrepreneur has limited ability and liability to carry on all the functions of the production.
29. Partnership.
Joint contribution of labor or property, or both, by the partners, joint control of the operations and a division of resulting profits or losses.
30. Profit-type Corporation.
A legal entity (based on profit motive) chartered by a state or the federal Govt. which is distinct and separate from the individuals who own it
31. Co-operative.
Business voluntarily organized, operating at cost, which is owned, capitalized and controlled by member patrons as users, sharing risks and benefits proportional to their participation.
32. Budget deficit
The amount by which the expenditures of the federal Government exceed its revenues in any year.
33. Budget line
A line which shows the different combinations of products a consumer can purchase with a specific money income, given the products prices.
34. Capital flight
The transfer of savings from developing countries to industrially advanced countries to avoid Government expropriation , taxation, and high rates of inflation or to realize better investment opportunities.
35. Ceiling price
A legally established maximum price for a good or service.
36. Declining industry
An industry in which economic profits are negative (losses are incurred) and which will, therefore, decrease its output as firms leave it.
37. .Decreasing –cost industry
An industry in which expansion through the entry of firms decreases the prices, firms in the industry must pay for resources and therefore decreases their production cost.
38. Developing countries
Many countries of Africa, Asia, and Latin America which are characterized by lack of capital goods, use of no advanced technologies, low literacy rate, high unemployment, rapid population growth, and labor forces heavily committed to agriculture.
39. Direct foreign investment
The building of new factories (or the purchase of existing capital)in a particular nation by corporations of other nations .
40. Dumping
The sale of products below cost in a foreign country or below prices charged at home.
41. Economic growth
(1) An outward shift in the production possibilities curve which results from an increase in resource quantity or quality or an improvement in technology;
(2) An increase either in real output (gross domestic product)or in real output per capita
42. Economics of scale
Reductions in the average total cost of producing a product as the firm expands the size of plant (its output )in the long run; the economics of mass production.
43. Elastic demand
Product or resource demand; whose price elasticity is grater than 1; means the resulting change in quantity demanded is greater than the percentage change in price.
44. Explicit cost
The monetary payment a firm must make to an outsider to obtain a resource.
45. Factors of production.
Economic resources, land, capital, labor, and entrepreneurial ability.
46. Firm
An organization which employs resources to produce a good or service for profit and owns and operates one or more plants.
47. Fiscal policy
Changes in government spending and tax collections designed to achieve a full- employment and non-inflationary domestic output; also called discretionary fiscal policy.
48. Fixed cost
Any cost which in total does not change when the firm changes its output; the cost of fixed resources.
49. Free trade
The absence of artificial (Government-imposed) barriers to trade among individuals and firms in different nations.
50. General Agreement on Tariffs and Trade(GATT)
The international agreement reached in 1947 in which 23 nations agreed to give equal and nondiscriminatory treatment to the other nations, to reduce tariff rates by multi-national negotiations, and to eliminate import quotas. Now includes most nations and has become the World Trade Organization.
51. Implicit cost
The monetary income a firm sacrifices when it uses a resource it owns rather than supplying the resource in the market; equal to what the resource could have earned in the best-paying alternative employment.
52. Indifference curve
A curve showing the different combinations of two products which give a consumer the same satisfaction or utility
53. Industry
A group of (one or more) firms which produces identical or similar produt
54. Inflation.
A rise in the general level of prices in an economy.
55. Infrastructure
The capital goods usually provided by the public sector for the use of its citizens and firms (for example, highways, bridges, transit systems, waste water treatment facilities, municipal water systems, and airports).
56. Interest rate
The annual rate at which interest is paid; a percentage of the borrowed amount.
57. Lump-sum tax
A tax which is a constant amount (the tax revenue of Government is same) at all levels of GDP.
58. Marginal cost
The extra (additional) cost of producing one more unit of output; equal to the change in total cost divided by the change in output (and in the short run to the change in total variable cost divide by the change in output).
59. Marginal propensity to consume
The fraction of any change in disposable income spent for consumer goods; equal to the change in consumption divided by the change in disposable income.
60. Marginal propensity to save
The fraction of any change in disposable income which households save; equal to the change in saving divided by the change in disposable income.
61. Monopoly
A market structure in which the number of sellers is so small that each seller is able to influence the total supply and the price of the good or service.
62. Patent
An exclusive right to inventors to produce and sell a new product or machine for a set period of time.
63. Per capita income
A nation’s total income per person; the average income of a population.
64. Perfectly elastic demand
Product or resource demand in which quantity demanded can be of any amount at a particular price; graphs as a horizontal demand curve.
65. Perfectly elastic supply
Product or resource supply in which quantity supplied can be of any amount at a particular price; graphs as a horizontal supply curve.
66. Perfectly inelastic demand
Product or resource demand in which price can be of any amount at a particular quantity of the product or resource demanded; quantity demanded does not respond to a change in price; graphs as a vertical demand curve.
67. Plant
A physical establishment which performs one or more functions in the production, fabrication, and distribution of goods and services.
68. Poverty
A situation in which the basic needs of an individual or family exceed the means to satisfy them.
69. Price ceiling
A legally established maximum price for a good or service.
70. Price floor
A legally determined price above the equilibrium price.
71. Price index
An index number which shows how the weighted average price of a “market basket” of goods changes through time.
72. Productivity
A measure of average output or real output per unit of input. For example, the productivity of labor may be found by dividing real output by hours of work.
73. Private sector
The households and business firms of the economy.
74. Product market
A market in which products are sold by firms and bought by households.
75. Public sector
The part of the economy which contains all government entities..
76. Pure capitalism
An economic system in which property resources are privately owned and markets and prices are used to direct and coordinate economic activities.
Quantity demanded
The amount of a good or service buyers (or a buyer) desire to purchase at a particular price during some period.
77. Resource market
A market in which households sell and firms buy resources or the services of resources.
78. Speculation
The activity of buying or selling with the motive of later reselling or re buying for profit.
79. Subsidy
A payment of funds (or goods and services) by a government, firm or household for which it receives no good or service in return; when made by a government, it is a government transfer payment.
80. Supply
A schedule showing the amounts of a good or service sellers (or a seller) will offer at various prices during some period.
81. Tariff
A tax imposed by a nation on an imported good.
82. Trade deficit
The amount by which a nation’s imports of goods (or goods and services) exceed its exports of goods (or goods and services).
83. Trade surplus
The amount by which a nation’s exports of goods (or goods and services) exceed its imports of goods (or goods and services).
84. Trade mark
A legal protection which; gives the originators of a product an exclusive right to use the brand name.
85. Value added
The value of the products sold by a firm less the value of the products (materials) purchased and used by the firm to produce the product.
86. Variable cost
A cost which in total increases when the firm increases its output and decreases when it reduces its output.
87. National income
Total income earned by resource suppliers for their contributions to gross national product; equal to the gross domestic products minus non income charges, minus net foreign factor income.
Consumption would be dependent variable
88. Perfectly inelastic supply product or resource supply in which price can be of any amount at a particular quantity of the product or resource demanded ;quantity supplied does not respond to a change in price; graphs as a vertical supply curve .
