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1989 State Cooperative Education Test



True/False
Indicate whether the sentence or statement is true or false.
 

 1. 

Every state has laws authorizing the formation of cooperative corporations.
 

 2. 

A member patron is defined as any person marketing, purchasing, or obtaining a service through a cooperative.
 

 3. 

The most important resource to be managed in a cooperative is its facilities.
 

 4. 

Cooperatives are unique in that their member-owners are also their patrons.
 

 5. 

In a partnership, a general partner’s liability extends to personal assets.
 


Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

 6. 

A cooperative is owned by its:

a.

Members

b.

Investors

c.

Lenders

 

 7. 

A cooperative is usually controlled on the basis of:

a.

Amount of stock held by investors

c.

Notes held by lender

b.

One vote per member

 

 8. 

A cooperative distributes benefits based on:

a.

Years of membership

b.

Amount of investment in the cooperative

c.

Use of cooperative’s services

 

 9. 

Cooperatives operate to maximize:

a.

Profits to be retained by the cooperative

b.

Return of investments in the cooperative

c.

Profits for member/patrons

 

 10. 

Farmer marketing, supply, and service cooperatives in the United States total about:

a.

5,000

b.

2 million

c.

50,000

 

 11. 

About what percent of major farm inputs do farmers buy from their cooperatives?

a.

25

b.

50

c.

75

 

 12. 

Memberships in farmer marketing, supply, and service cooperatives in the United States total about?

a.

1 million

b.

2 million

c.

4 million

 

 13. 

About what percent of their products do farmers market through their cooperative?

a.

25

b.

50

c.

75

 

 14. 

Most borrowed capital for agricultural cooperatives comes from:

a.

Banks for cooperatives

c.

Commodity Credit Corporation

b.

Commercial Banks

 

 15. 

The farmer-owned cooperative Farm Credit System provides what proportion of total agricultural credit?

a.

One-third

b.

One-half

c.

Two-thirds

 

 16. 

Which of the following is not a federal agency?

a.

Farm Credit Administration

c.

Rural Telephone Bank

b.

Rural Electrification Administration

d.

National Cooperative Bank

 

 17. 

Which of the following is not a general farm organization?

a.

American Farm Bureau Federation

c.

National Farmers Union

b.

Cooperative Extension Service

d.

National Grange

 

 18. 

The Agricultural Service is a ________________________.

a.

General Farm Organization

c.

Foundation

b.

Federal Agency

d.

Volunteer society

 

 19. 

Who owns the business in an Agricultural Cooperative?

a.

The individual

c.

The stockholders

b.

The partners

d.

The member-patrons

 

 20. 

Which of the following is not a required set of papers for organizing a cooperative?

a.

Articles of incorporation

c.

Credit verification

b.

Bylaws

 

 21. 

A _______________ cooperative is one which serves member, local, and regional cooperatives.

a.

Centralized

b.

Federated

c.

Mixed

d.

Nationalized

 

 22. 

Cooperatives in the United States are:

a.

Socialistic

c.

Government organizations

b.

Private enterprise

 

 23. 

The board of directors in a cooperative are:

a.

Elected by the membership

c.

Chosen by the government

b.

Appointed by the manager

 

 24. 

Requirements to vote in a cooperative are:

a.

Owning common stock

b.

Meeting membership qualifications

c.

Transacting more than 50% of your business with it

 

 25. 

Who sets policy in a cooperative?

a.

The board of directors elected by the membership

b.

The manager hired by the board of directors

c.

Provisions of the incorporating statute

 

 26. 

The manager of a cooperative:

a.

Usually owns the most stock

c.

Appoints the board of directors

b.

Is hired by the board of directors

 

 27. 

Almost all U.S. cooperatives are incorporated under:

a.

State incorporation statues

c.

The Capper-Volstead Act

b.

Federal incorporation statues

 

 28. 

The cooperative principle is defined as a:

a.

Wise or expedient rule of conduct or management

b.

Governing law of conduct, a general of fundamental truth

c.

Usual method, customary habit, action, or convention

 

 29. 

With respect to cooperatives, a usual method, customary habit, action, or convention is called a:

a.

Policy

b.

Practice

c.

Principle

 

 30. 

Cooperative Principles:

a.

Have evolved over time in terms of definition and acceptance

b.

Are accepted universally by all cooperatives

c.

Dictated by Federal Statue

 

 31. 

Credit is given to ________as the organizer of the first cooperative in the United States.

a.

Benjamin Franklin

c.

Thomas Jefferson

b.

George Washington

d.

Patrick Henry

 

 32. 

The ___________ is incorporated under laws of the District of Columbia as an education organization.

a.

American Institute of Cooperation

b.

Farm Credit Council

c.

National Cooperative Business Association

d.

National Council of Farmer Cooperatives

 

 33. 

People join cooperatives to _____________________.

a.

Make new friends

c.

Gain economic benefits

b.

Develop a tax shelter

d.

Guarantee a profit

 

 34. 

Cooperatives are generally classified by their major activity.  Which of the following is not a usual classification:

a.

Marketing

b.

Purchasing

c.

Lobbying

d.

Service

 

 35. 

Three groups of people are essential to start a cooperative and operate it successfully.  Which of the following is not a key group:

a.

Members

b.

Management

c.

Employees

d.

Investors

 

 36. 

Cooperatives can operate at lower costs per unit than farmers can individually by:

a.

Providing services for several or many farmers

b.

Hiring inexperienced managers

c.

Handling smaller volumes

d.

All of these are correct

 

 37. 

A cooperative that increases competition in a market could:

a.

Raise the going market prices for farm products

b.

Keep other firms from taking advantage of farmers

c.

Make the market more competitive

d.

All of these are correct

 

 38. 

Cooperatives limit returns on equity capital because:

a.

Cooperatives do not require as much capital as investor-oriented businesses

b.

They are not concerned about making a profit

c.

They want to discourage investments by patrons

d.

All of these are correct

 

 39. 

Cooperatives increase farm income by:

a.

Providing farmers higher prices for their products and lower prices for farm supplies

b.

Increasing per-unit costs

c.

Not distributing any net savings

d.

All of these are correct

 

 40. 

Cooperatives are organized to:

a.

Maximize net income

b.

Minimize costs of operation

c.

Provide services as economically as possible

d.

All of these are correct

 

 41. 

Cooperatives benefit farmers because:

a.

Individual farmers produce relatively small volumes

b.

Individual farmers produce so many different products that are well known to consumers

c.

Individual farmers produce large volumes

d.

All of these are correct

 

 42. 

A supply cooperative that “operates at cost”:

a.

Charges less than the going market price

b.

Charges prevailing market prices

c.

Charges pricing for supplies that are about equal to its costs

d.

All of these are correct

 

 43. 

A cooperative is organized:

a.

For member investment purposes

b.

To provide members a return on investments

c.

To provide economic services to its members

d.

To generate economic benefits for the general public

 

 44. 

A cooperative may be organized for the following reason:

a.

To improve bargaining power when dealing with other businesses

b.

To  increase marketing and purchasing costs

c.

To limit market access

d.

All answers are correct

 

 45. 

By working together in a cooperative, farmers can:

a.

Reduce their bargaining power

b.

Maintain their same level of operating efficiency

c.

Decrease their marketing and purchasing costs

d.

Increase market access

 

 46. 

The number of U.S. agricultural cooperatives peaked in:

a.

1850

b.

1930

c.

1950

d.

1990

 

 47. 

Declining numbers of U.S. agricultural cooperative is a function of:

a.

Lack of interest of farmers in cooperatives

b.

Consolidations, changing industry structure and declining farm numbers

c.

Changes in tax laws

d.

Farmers having better alternatives

 

 48. 

How many farm marketing, supply, and related service cooperatives operate in U.S.:

a.

Fewer than 3,000

c.

About 20,000

b.

About 5,000

d.

More than 1,000,000

 

 49. 

A cooperative may be organized for the following reason:

a.

To improve bargaining power when dealing with other businesses

b.

To increase marketing and purchasing costs

c.

To limit market access

d.

All of these are correct

 

 50. 

By working together in a cooperative, farmers can:

a.

Reduce their bargaining power

b.

Maintain their same level of operating efficiently

c.

Decrease their marketing and purchasing costs

d.

Increase market access

 

 51. 

The number of U.S. agricultural cooperatives peaked in:

a.

1850

b.

1930

c.

1950

d.

1990

 

 52. 

Declining numbers of U.S. agricultural cooperatives is a function of:

a.

Lack of interest of farmers in cooperatives

b.

Consolidations, changing industry structure, and declining farm numbers

c.

Changes in tax laws

d.

Farmers having better alternatives

 

 53. 

How many farm marketing, supply, and related service cooperatives operate in U.S.:

a.

Fewer than 3,000

c.

About 20,000

b.

About 5,000

d.

More than 1,000,000

 

 54. 

U.S. cooperatives exist in:

a.

A few types of business activities

b.

Nearly every type of agricultural business activity

c.

Agricultural activities only

d.

Midwest only

 

 55. 

Agricultural cooperatives are so small they are not among the 500 largest U.S. industrial corporations:

a.

True

b.

False

 

 56. 

The gross value of farm products marketed by U.S. farm cooperatives has:

a.

Decreased

b.

Increased

c.

Remained constant

 

 57. 

The majority of U.S. commercial farmers are involved in cooperatives:

a.

True

b.

False

 

 58. 

The agricultural commodity sector in U.S. where producers market the highest percentage of that commodity through cooperatives is the:

a.

Livestock sector

c.

Grain sector

b.

Dairy sector

d.

Fruit and vegetable sector

 

 59. 

The agricultural commodity sector in the U.S. where producers market the lowest percentage of that commodity through cooperatives is the:

a.

Livestock sector

c.

Grain sector

b.

Dairy sector

d.

Fruit and vegetable sector

 

 60. 

What percentage of agricultural supplies do U.S. producers purchase through cooperatives:

a.

Less than 10%

b.

About 25%

c.

About 75%

d.

Nearly 100%

 

 61. 

Objectives of marketing cooperatives include:

a.

Assure farmers dependable service

b.

Maximize income from sale of member products

c.

Provide information to farmers

d.

All of the answers are correct

 

 62. 

Marketing cooperatives try to maximize member’s income through/by:

a.

Adding value from processing operations

b.

Reducing per unit marketing costs by handling large volumes

c.

Elimination of all other competitors

d.

Two answers are correct

 

 63. 

Marketing cooperatives are owned by:

a.

Investors

c.

Federal government

b.

Producers of farm products

d.

Manager and employees of the co-op

 

 64. 

Bargaining cooperatives:

a.

Negotiate with farmers for products

b.

Negotiate with processors on behalf of farmer-members

c.

Negotiate for farm labor

 

 65. 

The most common sales method used by marketing cooperatives is:

a.

Auctions

c.

Buy-and-sell

b.

Bargaining

d.

Road side stands

 

 66. 

Bargaining cooperatives negotiate for:

a.

Product grade and quality variations

c.

Delivery schedules

b.

Product prices

d.

All of these are correct

 

 67. 

An advantage of the buy-and-sell method is:

a.

The cooperative controls the marketing decisions

b.

Farmers make their own decisions on when to sell their products

c.

Farmers always sell at the market’s high

 

 68. 

Pooling is a cooperative marketing method involving:

a.

Assembling or collecting products from many producers

b.

Combining sales returns and operating expenses, and distributing net returns to members according to the volume of product each provide

c.

Paying all pool members the same price regardless of quality

d.

Two answers are correct

 

 69. 

Payments to producers from commodity pools are made:

a.

In one lump sum when the commodity is delivered

b.

In a series of payments as the commodity is marketed

c.

In one lump sum after the product is sold

d.

To the Federal government

 

 70. 

Advantages of commodity pools include:

a.

Spreads market risks

c.

Helps finance the cooperative

b.

Permits orderly marketing

d.

All of these are correct

 

 71. 

Patronage refunds may be calculated on the basis of:

a.

Dollar value of business done with a cooperative

b.

Physical units of business done with a cooperative

c.

A combination of dollar value and physical units

d.

All of these answers are correct

 

 72. 

Most of the equity of marketing and farm supply cooperatives comes from:

a.

Per-unit capital retains

c.

Retained patronage refunds

b.

The direct cash investment of members

d.

Unallocated reserves

 

 73. 

Fixed assets do NOT include:

a.

Inventory of products for resale

c.

Equipment

b.

Buildings

d.

Land

 

 74. 

Current liabilities do NOT include:

a.

Accounts payable

c.

Short-term loans

b.

Accrued expenses

d.

Retained earnings

 

 75. 

Total liabilities do NOT include:

a.

Fixed assets

c.

Other assets

b.

Investments in other cooperatives

d.

All answers are correct

 

 76. 

A farmer cooperative is a type of business that:

a.

Buys things, like grain and milk

b.

Sells things, like fertilizer and feed

c.

Invests money in buildings and equipment

d.

Makes and loses money

e.

All answers are correct

 

 77. 

Land, buildings, and equipment are examples of a cooperative’s:

a.

Member quality

b.

Assets

c.

Liabilities

 

 78. 

A balance sheet for a cooperative does NOT contain information on:

a.

The money a cooperative borrows

c.

The amount a cooperative sells

b.

What a cooperative owns

 

 79. 

A cooperative should be operated to make a profit for:

a.

Only the people who invest in it

c.

Only full-time farmers

b.

The members who use it

 

 80. 

The cost of borrowing money is called interest paid.

a.

True

b.

False

 



 

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