Multiple Choice Questions (3 points each)

(11) If goods X and Y are substitues, which of the following could (11)_______

be the value of the cross-price elasticity between X and Y

1. -0.5
2. -5
3. neither a), nor b)
4. both a) and b)

(12) A 6% increase in the price of tea causes a 12% increase (12): D

in the demand for coffee. The cross elasticity of demand for coffee with

respect to the price of tea is:

a) -0.5

b) 0.5

c) -2.0

d) 2.0

(13) All of the following statements are correct except: (13)_______

1. Marketing mix comprises product, price, promotion, and place.
2. Market intelligence is an important facilitating function that makes possible the smooth performance of the agro-food supply chain.
3. Standardization and transportation are facilitating functions.
4. Speculative middlemen buy and sell products with the major goal of profiting from short-term price fluctuations.

(14) All of the following statements are incorrect except: (14)_______

1. Farm sector is not part of the food marketing system.
2. The relationship between farmers and food marketing firms is only competitive and not complementary.
3. Competition plays a key role in fostering pricing efficiency.
4. Livestock commission firms receive their income from merchandising livestock products.

(15) All of the following statements are correct except: 15)_______

(a) Economies of scale brought by specialization is one reason why middlemen exist.

(b) Allocative efficiency is only possible in perfectly competitive markets.

(c) The standardization function helps achieve productive and allocative efficiencies.

(d) Agent middlemen provide market knowledge to buyers and sellers and benefit from short-run price fluctuations.