Flashcards in Chapter 2 Deck (36)
something of value owned by a farm or a ranch. Generally divided into either physical and financial assets or current (short term) and fixed (intermediate and long term) assets
Define balance sheet
a financial statement reporting the value of real estate, non-real estate, and financial assets owned by farms and ranches and also outstanding debt
refers to the number and market power of firms marketing their products in a particular market. A market with a small number of firms accounting for the majority of total sales is said to have a high degree of concentration
also referred to as net worth, represents the owners share of the business. Equity is found by subtracting total liabilities from total assets
Define farm sector
sector of the economy comprised of farms and ranches producing raw agricultural products. Often referred to as the farm business sector
Define financial structure
refers to the right-hand side of the balance sheet or the amount of debt the business has relative to the amount of equity the owner has invested in the company
Define food and fiber industry
consists of business entities that are involved in one way or another with the supply of food and fiber products to consumers
define gross domestic product
(GDP) referred to as the nation's output. Equal to consumer expenditures, business investment, government spending, and net exports
define gross farm income
annual level of income received from farming activities before farm expenses, taxes, and withdrawals have been deducted
refers to the nominal dollar value that has been converted to a real dollar value using a price deflator like the consumer price index or CPI
one of four general classes of inputs captured in a production function. Includes hired and unpaid family labor but excludes management.
one of four general classes of inputs captured in a production function. Refers to the soil and other attributes of land used to produce a raw agricultural product
define marketing bill
the value of food expenditures contributed by firms beyond the farm gate
the various inputs used to produce a good or provide a service
the combination of two or more firms into one
define net farm income
gross farm income minus farm expenses and taxes
define nominal dollar values
the current price or value of a good, service or asset. Nominal values refer to economic measures for which no adjustments to inflation have been made
define output index
an index that shows the level of current production or output of a particular commodity or group of commodities relative to a particular year, or base period
define price index
an index that shows the level of current price of a particular commodity or group of commodities relative to a particular year or base period
level of output per unit of input. Crop yield per acre is a measure of productivity
returns on capital invested in farm assets represent a measure of profitability. May be expressed in dollar terms or in percentage terms
define real dollar values
refers to the current price or value of a good, service, or asset adjusted for inflation
The percentage of disposable income currently spent on food in the U.S. is about _____.
Bill Toney, a hobby farmer from Virginia, has a net worth of $16 million. He has assets of $30 million and liabilities of $ ____ million.
(assets - liabilities = net worth) liabilities = $14 million
The portion of food expenditures associated with the activities of firms beyond the farm gate is known as the ______.
Suppose that the index of prices received by the farmers for 2011 was 0.97 and the base year of this index was 2000, what can we conclude?
relative to 2000, farm prices were 3% lower in 2011.
Since WWII, there have been increases in productivity in the agricultural sector. This trend is due in part to:
a. the substitution of capital for labor
b. increases in farm size
c. the decline in numbers of farms
What are the 5 sectors of the food and fiber industry?
1. farm input supply sector
2. farm sector
3. processing and manufacturing sector
4. wholesale and retail sector