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MindTap Chapter 2: Theo Chocolate Quiz
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MindTap Chapter 2: Theo Chocolate Quiz

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Questions and Answers

According to the video, producers of cocoa have a hard time negotiating with chocolate manufacturers because:

  • Of international laws restricting the flow of cocoa across borders.
  • Cocoa is highly perishable and cannot be held back until market conditions improve.
  • Commodity price fluctuations make risk hedging difficult for farmers.
  • The barriers to entry are high in chocolate manufacturing—there are only about 12 producers—making it difficult for farmers to negotiate on price. (correct)
  • Which of the following is NOT one of the elements of the 'triple bottom line'?

  • Planet
  • People
  • Production (correct)
  • Profit
  • The fair trade practices used by Theo Chocolate help raise the price paid to farmers by:

  • Providing a transparent negotiating system that enables farmers to increase the quality of their product. (correct)
  • Teaching farmers how to manage finances better.
  • Forcing chocolate producers to pay a minimum amount for cocoa.
  • Unionizing cocoa farmers.
  • Study Notes

    Theo Chocolate: Cocoa Producers and Negotiation Challenges

    • Cocoa producers face difficulties negotiating with chocolate manufacturers due to high barriers to entry, with only about 12 major producers in the industry.
    • Farmers struggle to negotiate prices effectively due to the limited number of chocolate manufacturers, which consolidates market power in favor of the producers.
    • Cocoa's perishable nature complicates price negotiations, as it cannot be stockpiled for better market conditions.

    Triple Bottom Line

    • The "triple bottom line" is a sustainability framework that evaluates performance based on three key elements: People, Profit, and Planet.
    • Production is NOT included as a component of the triple bottom line, highlighting a focus on broader social and environmental impacts.

    Fair Trade Practices at Theo Chocolate

    • Theo Chocolate enhances the financial stability of cocoa farmers through fair trade initiatives.
    • A transparent negotiating system is implemented, allowing farmers to improve the quality of their cocoa and secure better prices.
    • These practices promote minimum pricing for cocoa, benefitting farmers in the long run and fostering sustainable agriculture.

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    Description

    This quiz explores the challenges cocoa producers face in negotiations with chocolate manufacturers, as highlighted in the MindTap video case on Theo Chocolate. Review key concepts and test your knowledge on the economic dynamics affecting the cocoa industry.

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