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Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question. |
| | 1. | Legislation (act) which allows producers of agricultural products to act together in associations to market their products without being in violation of antitrust laws | a. | Capper-Volstead Act | c. | Farm Credit Act | | b. | Cooperative Marketing Act | d. | Smith-Lever Act | | | | | | |
| | 2. | A _____________ cooperative is one which serves member local and regional cooperatives. | a. | Centralized | b. | Federated | c. | Mixed | d. | Nationalized | | | | | | | | | | |
| | 3. | Cooperative have specialized banks to serve their financial needs. |
| | 4. | Threshing bees, neighborhood barn raising, and cheese rings of the early 1800’s are all examples of informal cooperatives. |
| | 5. | Centralized cooperatives are cooperatives: | a. | In which farmers hold direct membership | | b. | Which are owned by other cooperatives | | c. | Which are controlled by the Central Committee of planned economy countries | | d. | Located in the center of the US | | | | |
| | 6. | The majority of US commercial farmers are involved in cooperatives: |
| | 7. | Declining numbers of US 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 | | | | |
| | 8. | Most cooperative businesses are incorporated, |
| | 9. | Cooperative farming is: | a. | Rare in the United States | c. | Common among corn growers | | b. | Common in the United States | d. | Common among alfalfa producers | | | | | | |
| | 10. | Cooperative management is concerned primarily with: | a. | Maximizing the profit of the cooperatives | | b. | Meeting the needs of farmer-members | | c. | Fulfilling members’ needs while maintaining a strong business | | d. | Meeting government regulations | | | | |
| | 11. | A cooperative is organized: | a. | For member investment purposes | | b. | To provide members a return on investment | | c. | To provide economic services to its members | | d. | To generate economic benefits for the general public | | | | |
| | 12. | Cooperatives exist because: | a. | Farmers are greedy | | b. | Existing firms are not adequately servicing the needs of farmers | | c. | Farmers like to work together | | d. | Farmers want to put other firms out of business | | | | |
| | 13. | A cooperative often has: | a. | More objectives than a non-cooperative business | | b. | Less objectives than a non-cooperative business | | c. | Different objectives that a non-cooperative business | | d. | The same objectives as a non-cooperative business | | | | |
| | 14. | Cooperatives are organized to: | a. | Maximize net income | | b. | Minimize costs of operation | | c. | Provide services as economically as possible | | d. | All of the answers are correct | | | | |
| | 15. | For US agricultural, at the first handler level, cooperatives marketed what percentage of all agricultural products: | a. | Less than 10% | b. | About 25% | c. | About 75% | d. | Nearly 100% | | | | | | | | | | |
| | 16. | Agricultural cooperatives are so small they are not among the 500 largest US industrial corporations: |
| | 17. | In the US, there are member-owned cooperatives that provide: | a. | Farm Insurance | c. | Telephone service | | b. | Health care | d. | All of these answers are correct | | | | | | |
| | 18. | The government agency that regulates the cooperatively owned Farm Credit System is: | a. | The National Credit Union Administration | | b. | The Farm Credit Administration | | c. | The US Department of Agricultural | | d. | The Rural Electric Administration | | | | |
| | 19. | The gross value of farm products marketed by US farm cooperatives has: | a. | Decreased | b. | Increased | c. | Remained constant | | | | | | | | |
| | 20. | A key element of pooling is: | a. | Sales are handled on an individual account basis | | b. | Risk-sharing | | c. | cash-at-delivery | | | | |
| | 21. | Uniform pricing among members is cooperative principle and legal requirement |
| | 22. | A marketing agreement is: | a. | A written contract between the cooperative and a member | | b. | A contract with an advertising agency | | c. | An oral agreement between members and outside buyers | | | | |
| | 23. | A cooperative which integrates vertically: | a. | Adds branch facilities to perform the same types of services | | b. | Performs more functions or services to the same product as it moves from farmer to consumer | | | | |
| | 24. | Cooperative bargaining is effective due to: | a. | Improved operating efficiency of member farms | | b. | Ability to control large volumes of product | | c. | Additional processing | | d. | All of these answers are correct | | | | |
| | 25. | A marketing agency-in-common is: | a. | A brokerage firm hired jointly by two or more cooperatives | | b. | A jointly-owned cooperative warehousing operation | | c. | Like a federated cooperative that serves as a marketing agent of its members | | | | |
| | 26. | Objectives of marketing groups include: | a. | Assure farmers dependable service | | b. | Maximize income from sale of member products | | c. | Provide information to farmers | | d. | All of these answers are correct | | | | |
| | 27. | A cooperatives “brand franchise” refers to: | a. | Retail stores that carry the cooperatives brand of products | | b. | Recognition and image of the cooperatives brand among consumers | | c. | The period of time during which a competitor may not copy the cooperatives products | | | | |
| | 28. | With the percent-of-equity redemption plan: | a. | A cash dividend is paid instead of redeeming equity | | b. | The same percent of equity capital is redeemed from all equity holders | | c. | The earliest year outstanding is redeemed | | d. | Only equity of inactive members is redeemed | | | | |
| | 29. | Who must decide in situations involving conflicting interests of membership groups? | a. | Cooperative membership committee | c. | The general manager | | b. | Senior advisors of a cooperative | d. | The board of directors | | | | | | |
| | 30. | When cooperatives suffer an operating loss, the loss is usually: | a. | Charged to unallocated equity | c. | Passed on to the regional cooperative | | b. | Billed directly to members | | | | | | | | |
| | 31. | Agricultural cooperatives borrow money from: | a. | Commercial banks | c. | Cooperative lenders | | b. | Other cooperatives | d. | All of these answers are correct | | | | | | |
| | 32. | Limited return on equity means: | a. | A cooperative must not pay all patronage refunds in cash | | b. | Cooperatives are limited as to how high dividends on equity capital can be | | c. | The earnings of the cooperative must be shared among the patrons, customers, and employees | | d. | The amount of interest a cooperative can pay on borrowed funds is limited | | | | |
| | 33. | A cooperatives equity financing plan should: | a. | Give investors the highest return possible on their investment | | b. | Try to keep members investment as low as possible | | c. | Be equitable to members individually and in agreement with cooperative principles | | d. | Rely on longtime members | | | | |
| | 34. | The officers of a cooperative are usually selected by the: | a. | Members | b. | Board president | c. | Directors | d. | Extension agent | | | | | | | | | | |
| | 35. | Developing long-range plans for the cooperative is a responsibility of the: | a. | Directors | b. | Board President | c. | Manager | d. | Members | | | | | | | | | | |
| | 36. | Which of the following statements is Least likely to be true? | a. | The question of delegation of authority is directly related to the question of centralization or decentralization | | b. | The manager can delegate his or her authority, but not responsibility | | c. | Having too few subordinates may cause problems but it will lower costs | | d. | Management is an indispensable element in business success | | | | |
| | 37. | The first and fundamental statement of antitrust policy is: | a. | The Clayton Act | c. | The Robinson-Patman Act | | b. | The Sherman Act | d. | The Federal Trade Commission Act | | | | | | |
| | 38. | The Capper-Volstead Act: | a. | Prohibits collaboration with non-cooperatives | | b. | Allows collaboration with non-cooperatives | | c. | Says nothing about collaboration with non-cooperatives | | d. | Prohibits cooperatives from enhancing the price of any agricultural product | | | | |
| | 39. | Which of the following has NOT been a major influence in the development of agricultural cooperatives in the US: | a. | Economic conditions | c. | Farmer organization leadership | | b. | Political party in power | d. | Public policy | | | | | | |
| | 40. | A marketing cooperative using proportional voting and paying a 10% return on equity capital would not be meeting the requirements of the: | a. | The Cooperative Marketing Act | c. | The Capper-Volstead Act | | b. | State statutes | d. | The International Cooperative Alliance | | | | | | |
| | 41. | “Open membership” means anybody can join the cooperative |
| | 42. | The predecessor of the National Farmers Union was the: | a. | Farm Bureau | | b. | Grange | | c. | Farmers Alliance | | d. | Farmers Educational and Cooperative Union of America | | | | |
| | 43. | Early farm organizations which were pioneers in spreading cooperative principles into agricultural communities: | a. | American Farm Bureau | | b. | Grange | | c. | Farmers Alliance | | d. | Grange and the Farmers Alliance | | e. | American Farm Bureau and the Farmers Alliance | | | | |
| | 44. | The largest US cooperative membership, according to ACS/USDA occurred during what period: | a. | 1929-30 | b. | 1940-41 | c. | 1950-51 | d. | 1955-56 | | | | | | | | | | |
| | 45. | Cooperatives can be organized to transact business in: | a. | Only marketing of farm products, or purchasing of farm supplies, services, and related needs. | | b. | Only farming related activities, food processing, and food distribution services | | c. | Almost any legitimate field or activity | | d. | Only in a few countries throughout the world | | | | |
| | 46. | Economic growth generally implies: | a. | No change in trade between economic units | | b. | Increased trade between economic units | | c. | Decreased trade between economic units | | d. | None of these answers are correct | | | | |
| | 47. | The Sherman Act: | a. | Was passed to legalize the organization of agriculture associations | | b. | Allowed farmers to organize free of the threat of antitrust prosecution | | c. | Prohibited certain kinds of price discrimination | | d. | Prohibited monopolizing or attempts to monopolize | | e. | None of these answers are correct | | | | |
| | 48. | A farmer getting more land to expand his production would be an example of: | a. | Vertical integration | | b. | Horizontal integration | | c. | Both Vertical Integration and Horizontal Integration | | d. | None of these are correct | | | | |
| | 49. | Patrons with a more elastic demand are: | a. | Less responsive to price changes | c. | not responsive to price changes | | b. | More responsive to price changes | | | | | | | | |
| | 50. | How can a farmer spread his risk? | a. | Plant a diversified crop | c. | Use the loan markets | | b. | Use futures markets | d. | All of the answers are correct | | | | | | |
| | 51. | Elasticity of demand, as it relates to cooperatives is: | a. | a measurement of patron responsiveness to a change in price | | b. | a measurement of price responsiveness to a change in quantity | | c. | demanding more and getting less | | | | |
| | 52. | Centralized cooperatives serve local co-op members from a central location: |
| | 53. | Which is NOT a requirement of section 521 tax status? | a. | Must be a farmer, fruit grower, or similar association | | b. | Must conduct no more than 50 percent of its business with nonmembers | | c. | Must treat members and nonmembers in the same manner | | d. | Must pay at least 8 percent dividends on member stock | | | | |
| | 54. | Limited credit is sometimes included as a cooperative principle. Why? | a. | Extensions of credit increase the overall capital needs of a cooperative and may lead to inequalities among members | | b. | Extension of credit is not profitable | | c. | Patrons resist any additional credit sources | | d. | Credit is not needed by agricultural producers | | | | |
| | 55. | At year end, a cooperative member received the following--notification of a $300 non-qualified patronage refund allocation, a $100 check representing a 100 % cash patronage refund on consumer household appliances for home use, and a $150 check for redemption of cash investment made in starting a cooperative. How much should be included as member taxable income? | a. | $550 | b. | $250 | c. | $150 | d. | nothing | | | | | | | | | | |
| | 56. | Direct cash investment in the equity of cooperatives: | a. | Is not covered by Federal or State regulations | | b. | Is vigorously supervised by State and Federal regulators | | c. | Must be considered carefully, even though most cooperative investments, because of their members, and limited exemptions, are not registered with State or Federal agencies | | d. | Is not allowed by Federal security regulations | | | | |
| | 57. | Studies have shown most cooperative failures are due to: | a. | Ineffective management | c. | Unavailability of products | | b. | Too rapid expansion | d. | Lack of qualified employees | | | | | | |
| | 58. | Which future trends in the cooperative environment will likely happen? | a. | Increase of those in the service/producing industry | | b. | Great increase in the percentage of government workers | | c. | A shift from the hourly wage rate to the salary for workers | | d. | All of the answers are correct | | | | |
| | 59. | The authority and responsibility for the overall health of the cooperative rests with the: | a. | Manager | b. | Directors | c. | Board President | d. | Extension agent | | | | | | | | | | |
| | 60. | Cooperative “management by objectives” is a concept relating to: | a. | Recruiting and selection | c. | Determination of needs | | b. | Performance appraisal | d. | Orientation and training | | | | | | |
| | 61. | An appropriate cooperative policy toward involvement in political matters is: | a. | Be involved at all levels, as all governments affect business | | b. | Stay out, politics is a dirty business that should be avoided | | c. | Only be involved in local matters, where the impact is easiest to see | | d. | Only be involved at the national level, where you are part of the big picture | | | | |
| | 62. | What is the first step in making a decision? | a. | Deciding who is responsible for deciding | | b. | Defining the problem | | c. | Identifying alternative solutions | | d. | Estimating the costs involved in the decision | | | | |
| | 63. | The legal document which must be filed in the state of incorporation for the formation of the cooperative is: | a. | Articles of incorporation | c. | Marketing agreement | | b. | Bylaws | d. | All of the answers are correct | | | | | | |
| | 64. | “Per se” rules violations: | a. | Are not judged by a rule of reason | | b. | Illegal no matter what their purpose or effect | | c. | Include price fixing | | d. | All of the answers are correct | | | | |
| | 65. | Most farmer cooperatives are ____ organizations. Individual farmers make up the membership. These 4,791 centralized cooperatives usually serve a local area or community, county, or several counties. Most local associations usually perform a limited number of the first steps of marketing. In farm supply associations, practically all sales are at the retail level. A few centralized cooperatives operate over the large geographic areas and have members in several states. They often provide more vertically integrated services such as processing farm products or manufacturing feed and fertilizer. | a. | federated cooperatives | c. | service cooperatives | | b. | marketing cooperatives | d. | centralized | | | | | | |