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Questions and Answers
What occurs if the slope of the supply curve is less than the absolute value of the slope of the demand curve?
What occurs if the slope of the supply curve is less than the absolute value of the slope of the demand curve?
What is the expected outcome when the supply curve is steeper than the demand curve?
What is the expected outcome when the supply curve is steeper than the demand curve?
Which of the following best describes the farmer's experience during a price signal of high prices?
Which of the following best describes the farmer's experience during a price signal of high prices?
Why is maintaining good financial records important for a farm?
Why is maintaining good financial records important for a farm?
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If the demand curve is more elastic than the supply curve, what type of market behavior is expected?
If the demand curve is more elastic than the supply curve, what type of market behavior is expected?
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What does the term agribusiness encompass?
What does the term agribusiness encompass?
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What is indicated by a demand curve that is downward-sloping?
What is indicated by a demand curve that is downward-sloping?
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What characterizes inelastic demand as indicated by price elasticity of demand (PED)?
What characterizes inelastic demand as indicated by price elasticity of demand (PED)?
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Which of the following is a determinant of supply?
Which of the following is a determinant of supply?
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What does the price elasticity of supply (PES) measure?
What does the price elasticity of supply (PES) measure?
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What does the agricultural cobweb model explain?
What does the agricultural cobweb model explain?
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What happens to the demand curve when there is a change in consumer preferences?
What happens to the demand curve when there is a change in consumer preferences?
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If the absolute value of price elasticity of demand (PED) is greater than 1, what can be said about the demand?
If the absolute value of price elasticity of demand (PED) is greater than 1, what can be said about the demand?
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What is a key factor that causes a shift in the demand curve?
What is a key factor that causes a shift in the demand curve?
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What is indicated by a Giffen good in the context of demand?
What is indicated by a Giffen good in the context of demand?
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Study Notes
VETM 2501: ANIMAL PRODUCTION I - LECTURE: GENERAL FARM MANAGEMENT 3
- Course is about animal production
- Subject matter is general farm management.
OUTLINE
- Learning objectives are included in the course
- Introduction to the course topic
- Supply and demand in livestock production is a key topic
- Financial record keeping and its importance in farm management
LEARNING OBJECTIVES
- Understanding the application of agribusiness
- Explaining supply and demand in the livestock industry
- Defining price elasticity of demand and supply
- Explaining the agricultural cobweb model
- Understanding financial record keeping and its importance alongside record keeping methods
FARM BUSINESS FINANCIAL MANAGEMENT MODEL
- Records, collecting and organizing
- Management reports, organizing, analyzing, and reporting
- Financial position
- Financial performance
- Financial statements, including balance sheet, income statement, statement of cash flows, and statement of owner equity
- Decision-making, including planning
- Pro forma
- Feasibility
- Profitability
- Risk-ability
- Budgets
- Cash
- Partial
- Enterprise
INTRODUCTION
- Agribusiness is defined as economic activities and social/demographic derivatives from farm products
- Agribusiness encompasses production, processing, transportation, and distribution of farm products
INTRODUCTION CONTINUED
- Successful farm management requires successful business management
- Necessary business components: payroll, inventory, budgets, and balance sheets.
MANAGEMENT DECISIONS
- Selecting profitable enterprise combinations
- Determining profitable farm size.
- Credit wise use
- Selecting profitable production methods and practices
- Determining profitable production levels
- Timing production
- Making marketing decisions
- Determining product quality
- Managing risk
SUPPLY AND DEMAND IN LIVESTOCK PRODUCTION
- Market price is determined by supply and demand in uncontrolled markets
- Market equilibrium occurs when supply and demand are balanced, and market prices stabilize
- Demand refers to the quantity of a good or service consumers are willing and able to buy at a certain price
- Factors affecting demand include consumer tastes and preferences, number of buyers, consumer income, price of related goods, and consumer expectations
- The demand curve is generally downward sloping meaning that as price decreases quantity demanded increases
- Exceptions to this include Giffen and Veblen goods
- Supply refers to the total amount of a good or service available to consumers
- Factors affecting supply include resource or input costs, production technology, taxes, subsidies, supplier's expectations about the future and number of sellers
- The supply curve is generally upward sloping meaning that as price increases quantity supplied increases
SUPPLY AND DEMAND IN LIVESTOCK PRODUCTION CONTINUED
- Price elasticity of demand (PED) measures the responsiveness of quantity demanded to a change in price
- PED is negative due to the inverse relationship between price and quantity demanded.
- PED can measure as inelastic (<1), unitary elastic (=1), and elastic (>1)
- Price elasticity of supply (PES) measures how much the quantity supplied changes when the price changes
- PES can be inelastic (<1), unitary elastic (=1), and elastic (>1)
- Agricultural markets often exhibit a time lag between supply and demand decisions, resulting in periodic price fluctuations, as described by the cobweb model
- The cobweb model can result in either stable or unstable price fluctuations, depending on the relative slopes of the supply and demand curves
FINANCIAL RECORD KEEPING AND ITS IMPORTANCE
- Financial record keeping is crucial to assess and mitigate farm business risks
- Proper record-keeping allows for informed decision-making, including tracking profits, losses, and expenses
- It enables analyzing profits and identifying profitable enterprises.
- Cash flow management is essential to ensure daily farm operations are funded
- Records are essential to make investments and plan for future business growth.
- Records can be used to obtain credit, and for income tax purposes.
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Description
This quiz covers key concepts in general farm management within the context of animal production. Topics include supply and demand in livestock production, financial record keeping, and the agricultural cobweb model. Understand agribusiness applications and the importance of financial management in achieving successful farm operations.
