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Miscellaneous Cooperative Education Questions Test


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

 1. 
Market prices provide all theinformation needed by firms to make decisions regarding what and how much to produce.
 

 2. 
Marketing cooperatives try tomaximize member’s income by handling large volumes, thereby reducing per-unit marketingcosts.
 

 3. 
Centralized cooperatives servelocal co-op members from a central location
 

 4. 
Uniform pricing among membersis a cooperatives principle and a legal requirement.
 

MultipleChoice
Identify the letter of the choice that best completes the statement or answers thequestion.
 

 5. 
The primary motivation forfarmer participation in cooperatives is:
a.
To improve theirwell-being
b.
To drive others out of business
c.
To improve the well being of the society
d.
None of these are correct
 

 6. 

Economic growth generallyimplies:
a.
No change in trade between economic units
b.
Increased trade between economic units
c.
Decreased trade between trade units
d.
None of these are correct
 

 7. 

Economies of sizemean:
a.
Costs increase as firms get larger
c.
Costs decrease as firms getlarger
b.
Profits increase as firms get larger
d.
Revenues increase as firms getlarger
 

 8. 

Economics of size encouragesfirms to expand:
a.
Horizontally
c.
Both horizontally andvertically
b.
Vertically
d.
None of  the above are correct
 

 9. 

If markets wereperfect:
a.
Investor-oriented firms and cooperatives would bepreferred
b.
No particular form of business organization would bepreferred
c.
Cooperatives would be preferred
d.
Both investor-oriented firms and cooperatives would bepreferred
 

 10. 

Economies ofsize:
a.
Can enhance the competitiveness of a market
b.
Will have no effect on the competitiveness of a market
c.
Can cause imperfect markets
d.
None of these arecorrect
 

 11. 

An oligopolist is oneof:
a.
A few sellers
b.
A few buyers
c.
Manysellers
d.
Many buyers
 

 12. 

An oligopsonist is oneof:
a.
A few sellers
b.
A few buyers
c.
Manysellers
d.
Many buyers
 

 13. 

An oligopolist may establishprices to the disadvantage of:
a.
Stockholders
c.
Buyers
b.
Sellers
d.
Both stockholders andbuyers
 

 14. 

An oligopsonist may establishprocess to the disadvantage of:
a.
Sellers
b.
Buyers
c.
Stockholders
 

 15. 

With limited economies of size,spatial (geographical) dimensions:
a.
Can decrease the competitiveness of amarket
b.
Can increase the competitiveness of a market
c.
Will have no effect on the competitiveness of amarket
d.
None of these are correct
 

 16. 

As grain elevators in a regionbecome fewer and larger:
a.
Cost of transporting grain by farmers mayincrease
b.
Cost of transporting grain by farmers maydecrease
c.
Cost of transporting grain by farmers will notchange
d.
None of these are correct
 

 17. 

The cost ofinformation:
a.
May result in a source of marketimperfection
b.
May increase market efficiency
c.
May result in a source of market imperfection and may increase marketefficiency
 

 18. 

A farmer getting more land toexpand his production would be an example of:
a.
Verticalintegration
b.
Horizontal integration
c.
Both vertical and horizontal integration
d.
None of these are correct
 

 19. 

Farmers buying a processingplant for their products would be an example of:
a.
Horizontalintegration
c.
Both horizontal and vertical integration
b.
Vertical integration
d.
None of these are correct
 

 20. 

An imperfect market providesincentives for farmers to:
a.
Verticallyintegrate
b.
Horizontally integrate
c.
Neither vertically or horizontally integrate
d.
Depends on the farmer
 

 21. 

A spatial monopoly is wherea:
a.
Few buyers control a geographical region
b.
Few sellers control a geographical region
c.
Single buyer controls a geographical region
d.
Single buyer controls a geographical region
 

 22. 

A spatial monosopy is wherea:
a.
Few buyers control a geographical region          
b.
Few sellers control a geographicalregion     
c.
Single buyer controls a geographicalregion     
d.
Single seller controls a geographicalregion
 

 23. 

The potential for cooperativeshelping farmers through better coordination of inputs, production, and marketing appearsto:
a.
Not exist
b.
Be small
c.
Be quite large
 

 24. 

Cooperatives allow farmersto:
a.
Gain cost efficiencies while reducing concerns about monopsonisticprofits
b.
Gain cost efficiencies while increasing monopsonisticprofits
c.
Achieve total control over prices
d.
None of these are correct
 

 25. 

In competitive long runequilibrium, process and outputs of cooperatives and investor-oriented firms willbe:
a.
The same
b.
Much different
c.
A little different
 

 26. 

If members of a marketingcooperative include potential patronage refunds in their production decisions, these members willlikely:
a.
Not change their production
b.
Decrease production
c.
Increaseproduction
 

 27. 

Economic growth generallyimplies:
a.
Increased specialization
b.
Increased trade between economic units
c.
Larger firms operating at each level of an economic units
d.
All of these are correct
 

 28. 

Formal economic theories ofcooperatives have evolved since the:
a.
1930’s
b.
1940’s
c.
1950’s
d.
1960’s
 

 29. 

An investor-orientedfirm should operate where:
a.
Marginal revenue > marginalcost
c.
Marginal revenue = marginal cost
b.
Marginal revenue < marginal cost
d.
None of these arecorrect
 

 30. 

Marginal revenue isthe:
a.
Change in revenue associated with a one unit change inoutput
b.
Change in revenue associated with a one unit change ininput
c.
Margin which a cooperative earns on revenues
d.
Change in total revenue
 

 31. 

A firm in a perfectlycompetitive market faces a:
a.
Downward sloping demandcurve
c.
Horizontal demand curve
b.
Vertical demandcurve
d.
Upward sloping demand curve
 

 32. 

A cooperative in a perfectlycompetitive market will:
a.
Advertise
b.
Not advertise
c.
Only advertise if thesituation
 

 33. 

For a firm in a less thancompetitive market:
a.
Average revenue < marginalrevenue
c.
Marginal revenue = average revenue
b.
Average revenue > marginal revenue
d.
None of these arecorrect
 

 34. 

A supply cooperative operatingwhere average total cost = average revenue would be following which objective:
a.
Maximize the net price received by patrons
b.
Maximize net income
c.
Operate at cost
d.
Minimize net price paid by patrons
 

 35. 

A supply cooperative operatingwhere marginal cost = marginal revenue would be following which objective:
a.
Maximize the net price received by patrons
b.
Operate at cost
c.
Minimize net price paid bypatrons
d.
Maximize net income
 

 36. 

If a supply cooperative wantsto minimize the net price paid by patrons before patronage refunds, where should theyoperate?
a.
Where average cost = average revenue
b.
Where marginal revenue = marginal cost
c.
Where marginal costs = marginal revenue
d.
None of these are correct
 

 37. 

If a supply cooperative wantsto minimize the net price paid by patrons after patronage refunds have been distributed, where shouldthey operate?
a.
Where the marginal cost = marginal revenue
b.
Where the average total cost = average revenue
c.
Where the marginal cost = average total cost
d.
Indeterminate
 

 38. 

Is the equilibrium stable if acooperative attempts to maximize net income?
a.
Yes
b.
No
c.
Depends on otherfactors
 

 39. 

Is the equilibrium stable if asupply cooperative attempts to operate at cost?
a.
Yes
b.
No
c.
Depends on otherfactors
 

 40. 

Is the equilibrium stable if asupply attempts to minimize net price paid by patrons:
a.
Yes
b.
No
c.
Depends on other factors
 

 41. 

If a supply cooperative hashigh production levels which keeps patrons from achieving the lowest cost, an incentive existsto:
a.
Freeze the current membership numbers
b.
Expand the current membership
c.
Restrict the current membership
 

 42. 

Supply cooperatives operatingin the declining cost portion of their cost function have an incentive to:
a.
Restrict nonmember business
b.
Expand nonmemberbusiness
c.
Freeze the amount of nonmember business
 

 43. 

Gains in vertical coordinationthrough cooperatives require:
a.
A decrease in the scope of decision makingby members
b.
An increase in the scope of decision making bymembers
c.
No change in the scope of decision making bymembers
 

 44. 

Marginal net revenue (marginalrevenue product) is defined as:
a.
The margin which a cooperative receivesfrom its revenues
b.
The change in revenue associated with aone unit change in output
c.
The change in revenue associated with aone unit change in input
 

 45. 

For a perfectly competitiveinput market:
a.
Marginal input cost < average input cost(supply)
b.
Marginal input cost > average input cost(supply)
c.
Marginal cost = average input cost (supply)
 

 46. 

For a less than perfectlycompetitive input market:
a.
Marginal input cost < average inputcost (supply)
b.
Marginal input cost = average input cost(supply)
c.
Marginal input cost > average input cost(supply)
d.
None of these are correct
 

 47. 

A marketing cooperative wishingto maximize the net price received by patrons should operate where:
a.
Average net revenue = average input cost (supply)
b.
Marginal net revenue = marginal input cost
c.
Marginal net revenue = average net revenue
 

 48. 

A marketing cooperative wishingto maximize income like an investor-oriented firm should operate where:
a.
Average net revenue = average input cost (supply)
b.
Marginal net revenue = marginal input cost
c.
Marginal net revenue - average net revenue
 

 49. 

A marketing cooperative wishingto operate at cost should operate where:
a.
Marginal net revenue = marginal inputcost
b.
Average net revenue = average input cost(supply)
c.
Marginal net revenue = average net revenue
 

 50. 

The objective which would givemembers of a marketing cooperative the lowest price for their product before considering patronagerefunds is:
a.
Operate at cost
b.
Maximize net price received by patrons
c.
Maximize net income like an investor oriented firm
 

 51. 

The objective which would givemembers of a marketing cooperative the lowest price for their product after considering patronagerefunds is:
a.
Maximize net income like an investor- orientedfirm
b.
Operate at cost
c.
Maximize net price received by patrons
 

 52. 


The objective which would give members ofa marketing cooperative the highest price for their product before considering patronage refundsincludes
a.
Maximize net price received by patrons
b.
Operating at cost
c.
Maximizing net income like aninvestor-oriented firm
d.
None of these arecorrect
 

 53. 

Marketing cooperatives maydeclare patronage refunds to:
a.
Members only
b.
Non-members only
c.
Both Non-members andmembers
 

 54. 


In developing broader markets formember’s products, cooperatives help to:
a.
Decreasecompetition
b.
Stabilize prices
c.
Both decrease competition and stabilize prices
 

 55. 

Cooperatives which contract forproduction of poultry and livestock provide:
a.
Breeding stock, feed, technical andmanagerial assistance, processing and marketing services
b.
Processing and marketing processes only
c.
Land, labor and facilities
 

 56. 

Producers who contract with acooperative to provide poultry or livestock are paid:
a.
Full market value
b.
Wholesale price
c.
A fee per unit
 

 57. 

Elasticity of demand, as itrelates to cooperatives is:
a.
A measurement of patron responsiveness toa change in price
b.
A measurement of price responsiveness to achange in quantity
c.
Neither a measurement of patron or priceresponsiveness to a change in price or quantity
 

 58. 

Patrons with a more elasticdemand are:
a.
Less responsive to price changes
b.
More responsive to price changes
c.
Not responsive to price changes
 

 59. 

The demand curve forlarge-volume patrons may be more elastic because:
a.
Many agribusiness firms offer favorableprices to large-volume patrons
b.
Many agribusiness firms do not offerfavorable prices to large-volume patrons
 

 60. 

Netting is a policyof:
a.
Discounting prices based on promptness of payment
b.
Establishing prices so  that losses in one division are absorbed by the netincome of another division
c.
Subtracting costs fromrevenue
 

 61. 

A distribution strategyis:
a.
A plan for paying patronage refunds to members
b.
Organizational or institutional linkages that perform marketingfunctions
c.
Equity revolvement practices
 

 62. 

A primary characteristic ofcompetitive markets is (are) :
a.
A large number of buyers and sellers
b.
A small number of buyers
c.
A large number of sellers
 

 63. 

An efficient market dependson:
a.
Low prices
b.
Concentration of marketpower
c.
Availability of information
 

 64. 

The presence of a cooperativein a market may be the result of:
a.
Market failure
b.
the need to assure market outlets or supplies
c.
The desire to capture profits from another level in the marketingsystem
 

 65. 

If the price received bysuppliers of the product decreases :
a.
The demand for the product must berelatively elastic
b.
The demand for the product must be relatively inelastic
 

 66. 

The market planner should bemost concerned with:
a.
The marketprice
c.
The competitor’s price
b.
The product he is marketing
d.
The potentialcustomer
 

 67. 

The major channel(s) utilizedto market cooperative products are:
a.
Wholesaling andretailing
c.
Selling
b.
Manufacturing
d.
Warehousing
 

 68. 

Which of the following can besaid to be included in cooperative marketing activities?
a.
Warehousing
b.
Transportation
c.
Retailing and wholesaling
d.
Communications
e.
All of these are correct
 

 69. 

To say that the demand for acommodity is elastic means:
a.
That the demand curve slopes downward andto the right
b.
That a greater quantity is sold at a lowerprice
c.
That a rise in price will increase totalrevenue
d.
That the change in quantity sold is proportionally greater than thechange in price
 

 70. 

When the demand for a productis elastic:
a.
A fall in price is more than offset by an increase in quantity sold,so that total revenue, even though less is sold
b.
A rise in price will increase total revenue, even though less issold
c.
Buyers are not much influenced by prices of competingproducts
 

 71. 

The demand for vegetables isprobably more elastic than the demand for:
a.
Food
b.
Carrots
c.
Spinach
d.
Automobiles
 

 72. 

A demand curve is completelyinelastic if:
a.
A rise in price causes a fall in quantitydemanded
b.
A fall in price causes a rise in the sellers’ total revenue
c.
The commodity in question is highlyperishable
d.
A change in price does not change quantitydemanded
 

 73. 

If the government imposes a taxon a commodity, it will obtain the most revenue if the demand for the product is:
a.
Perfectly inelastic
b.
Relativelyinelastic
c.
Perfectly elastic
d.
Relatively elastic
 

 74. 

If the demand is relativelyelastic, a change in price  (up or down) causes:
a.
A change in total revenue
b.
A change in total revenue in the oppositedirection
c.
An increase in total revenue
d.
A decrease in total revenue
e.
None of these arecorrect
 

 75. 

If the demand is relativelyinelastic, a change in price (up or down) causes:
a.
A change in total revenue in the samedirection
b.
A change in total revenue in the oppositedirection
c.
An increase in total revenue
d.
A decrease in total revenue
e.
No change in totalrevenue
 

 76. 

How can a farmer spread hisrisk?
a.
Plant a diversified crop
b.
Use futuremarkets
c.
Use the loan markets
d.
All of these are correct
e.
Both plant a diversified crop and usefuture markets
 

 77. 

Through marketingcooperatives:
a.
Farmers extend control over their production at least one step pastthe farm gate
b.
Members have a voice in the distribution and sale of thecommodity
c.
Members can be more insulated from price fluctuations than if theybargained individually
d.
All of these arecorrect
 

 78. 

Pooling is a cooperativemarketing method involving:
a.
Assembling products from manyproducers
b.
Combining sales returns and operating expenses, and distributingreturns
c.
Both assembling products from many producers and combining salesreturns and operating expenses, and distributing returns
 

 79. 

Advantages of commodity poolsinclude:
a.
Spreads market risks
c.
Helps finance thecooperative
b.
Permits orderly marketing
d.
All of these arecorrect
 

 80. 

Marketingagreements:
a.
Allow growers to maintain maximum flexibility in decisionmaking
b.
Transfer some decision making from individual growers to thecooperative
c.
Transfer some decision making from the cooperative to the individualgrowers.
 

 81. 

A cooperative association witha federated structure:
a.
Serves local and regional cooperativemembers
b.
Serves farmers directly
c.
Serves the federal government
 

 82. 

The effectiveness of bargainingassociations depends on:
a.
Improved operating efficiency of memberfarms
b.
Ability to control large volumes of product
c.
Additional processing
d.
All of these arecorrect
 

 83. 

A marketing agreementis:
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
 

 84. 

Per-unit capital retainsare:
a.
An out-of-pocket, one-time expense
b.
A deduction based on volume of product marketed through thecooperative
c.
the amount of product members can market on theirown
 

 85. 

Orderly marketingrequires:
a.
A degree of control over the product
b.
Advance information on product volumes available
c.
Authority to make firm sales commitments
d.
All of these are correct
 

 86. 

Bargaining cooperativesgenerally:
a.
Take the title and physical possession of memberproducts
b.
Perform processing functions
c.
Do not take title or physical possession of member products
 

 87. 

“Mixed”cooperatives are characterized by:
a.
Handling many different types ofproducts
b.
Providing both farm supply and marketingservices
c.
Serving both member -farmers and member-cooperatives
 

 88. 

Universified cooperatives maybe characterized by:
a.
Cost sharing amongproducts
b.
More uniformity of patrons
c.
More practical uniform pricing practices
d.
All of these are correct
 

 89. 

Forward integrationis:
a.
The extent to which cooperatives expand into new tradeterritories
b.
the extent to which cooperatives move products closer to theconsumer
c.
The extent to which cooperatives engage in agriculturalproduction
 

 90. 

Differential pricingmeans:
a.
Pricing different products differently
b.
Setting different prices in different trade areas
c.
Use of discounts and premiums
 

 91. 

The marketing technique used tocreate a unique image for a product called:
a.
Productdifferentiation
c.
Market segmentation
b.
Marketdifferentiation
d.
Product segmentation
 

 92. 

Price maintenance is a policydesigned to:
a.
Generate relatively large margins
b.
Maintain below-market prices
c.
Generate relatively small margins
 

 93. 

For price differentials to besuccessful, cooperatives must:
a.
Price uniformly to allpatrons
b.
Separate patrons into categories according to volume, location, methodof payment, or other criteria
c.
Offer no discounts orpremiums
 

 94. 

The objectives of structuralarrangements such as joint ventures,marketing agencies in-common, and holding companiesinclude:
a.
To increase market power
b.
To gain market entry
c.
To gain efficiencies inoperations
d.
All of these are correct
 

 95. 

A marketing agency-in-commonis:
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 itsmembers
 

 96. 

A key element of poolingis:
a.
Sales are handled on an individual account basis
b.
Risk-sharing
c.
Cash-at-delivery
 

 97. 

A cooperative which integratesvertically:
a.
Adds branch facilities to perform the same types of services
b.
Performs more functions or services to the same product as it movesfrom farmer to consumer
 

 98. 

Benefits of marketingcooperatives include which of the following:
a.
Expanded markets
b.
Loss of market power
c.
Increased farmincome
d.
Both expanded markets and increased farmincome
e.
All of these are correct
 



 
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