Theory question 109
Basic Agricultural Economics(a) Define: (i) demand; (ii) price elasticity of demand.
(b) Explain why the demand curve slopes downwards
(c) List four agents of agricultural marketing
(d) State two advantages and one disadvantage of each of the following agricultural extension teaching methods: (i) newspapers; (ii) television.
Show the model answer
(a)(i) Demand is the quantity of a commodity consumers are willing and able to buy at a given price and time
(ii) Price elasticity of demand is the degree of responsiveness of quantity demanded to a change in price (% change in quantity ÷ % change in price)
(b) As price falls, more people can afford the commodity and existing buyers buy more (income and substitution effects; diminishing marginal utility), so quantity demanded rises as price falls – the curve slopes downward from left to right
(c) Any four: wholesalers; retailers; middlemen/brokers; cooperative societies; commodity boards; processors; exporters; producers
(d)(i) Newspapers – advantages: reach many people; permanent, can be kept for reference; cheap. Disadvantage: useless to illiterate farmers; may not reach rural areas
(ii) Television – advantages: shows pictures and steps clearly; reaches many people at once; attractive. Disadvantage: costly; needs electricity; no direct feedback
Define, explain the curve, then lists.