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ASRB NET and ARS / SMS / STO recruitment Agricultural Marketing & Price Analysis: practice questions

ASRB NET and ARS / SMS / STO recruitment · India · Agricultural Scientists Recruitment Board (ICAR)

Original practice questions written to the published syllabus · not past papers
10worked here, free
30written to this exam in this subject
14syllabus units

About ASRB NET and ARS / SMS / STO recruitment

ASRB NET and ARS / SMS / STO recruitment is a professional certification run by Agricultural Scientists Recruitment Board (ICAR), for candidates in India. NET: one paper of 150 objective questions at 1 mark each, 2 hours, -1/3 negative, online, English or Hindi, Master's level. ARS: qualifying prelims, then mains 240 and interview 60.

Official site: pw.live.

We have not been able to confirm these details against the exam body's own specification, so fees, dates and pass marks are left out on purpose. Check the current format, eligibility, fees and dates on the official site.

Agricultural Marketing & Price Analysis in ASRB NET and ARS / SMS / STO recruitment

How farm produce moves from field to consumer, who takes what share, how markets are regulated and how prices behave over seasons and places.

Our 30 ASRB NET and ARS / SMS / STO recruitment questions in this subject: 2 easy, 17 medium, 11 hard, across 14 units.

10 practice questions, worked

Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.

These 10 were written to ASRB NET and ARS / SMS / STO recruitment and are not shown on any other exam's page.

Question 1 · medium

A bumper harvest of a staple cereal lowers total revenue received by farmers. The best explanation is that:

  1. Marketing costs per unit rise in proportion to the harvest
  2. Supply of the staple is perfectly elastic in the short run
  3. Demand for the staple is price inelastic, so price falls proportionately more than quantity rises
  4. Demand for the staple is price elastic, so consumers switch to other foods and total spending on it falls
Answer and working

C. Demand for the staple is price inelastic, so price falls proportionately more than quantity rises

With inelastic demand (absolute elasticity below one), a rise in quantity requires a more than proportionate fall in price, so price x quantity falls. If demand were elastic, revenue would rise with a larger crop. This is the logic of Gregory King's observation.

Question 2 · medium

The retail price of a vegetable today is 40 currency units/kg. The farm price today is 25 currency units/kg, but the produce now on retail shelves was bought from farmers three days ago at 22 currency units/kg. What are the concurrent and lagged margins?

  1. Concurrent 15 currency units/kg; lagged 18 currency units/kg
  2. Concurrent 3 currency units/kg; lagged 18 currency units/kg
  3. Concurrent 18 currency units/kg; lagged 15 currency units/kg
  4. Both 15 currency units/kg
Answer and working

A. Concurrent 15 currency units/kg; lagged 18 currency units/kg

Concurrent margin compares prices at the same time: 40-25 = 15 currency units. Lagged margin compares today's retail price with the farm price when that produce was bought: 40-22 = 18 currency units. Swapping the two is the common error.

Question 3 · hard

A farmer can sell potatoes at harvest for 1000 currency units per 100 kg or put them in cold storage. Cold storage rent is 150 currency units per 100 kg for the season, interest on the value tied up is 40 currency units per 100 kg and weight loss in storage is 5%. What is the minimum post-storage price per 100 kg needed to break even?

  1. 1,190.00 currency units
  2. 1,249.50 currency units
  3. 1,252.63 currency units
  4. 1,052.63 currency units
Answer and working

C. 1,252.63 currency units

One stored 100 kg becomes 95 kg. Cost per stored 100 kg = 1000+150+40 = 1190 currency units. Break-even price P satisfies P x 0.95 = 1190, so P = 1190/0.95 = 1,252.63 currency units. Multiplying by 1.05 instead of dividing by 0.95 gives 1,249.50 currency units, slightly too low; ignoring shrinkage gives 1190 currency units. 1,052.63 currency units allows for shrinkage but leaves out storage rent and interest (1000/0.95).

Question 4 · medium

An interlinked credit-product market in agricultural marketing refers to:

  1. A bank lending to a cooperative against warehouse receipts issued for members' stored produce
  2. A trader or commission agent lending to a farmer on condition that the farmer sells through him
  3. Government procurement at support prices financed by the central bank
  4. A futures exchange providing margin finance
Answer and working

B. A trader or commission agent lending to a farmer on condition that the farmer sells through him

Tied loans from commission agents give them a captive supply and can lower the price the farmer gets. The other options involve formal credit without a sale obligation.

Question 5 · hard

Quarterly prices are: Year 1 Q1 100, Q2 120, Q3 90, Q4 110; Year 2 Q1 104. Using a centred four-quarter moving average, what is the ratio-to-moving-average for Year 1 Q3?

  1. 85.31
  2. 85.88
  3. 85.71
  4. 84.91
Answer and working

A. 85.31

First 4-quarter MA (Q1-Q4) = 105.0; second (Q2-Q1 next) = 106.0. The centred MA at Q3 averages them: (105.0+106.0)/2 = 105.5. Ratio = 90/105.5 x 100 = 85.31. Using an uncentred MA (85.71 or 84.91) misaligns the average with the quarter. 85.88 divides by a simple five-quarter average (104.8) instead of the centred MA.

Question 6 · medium

The price elasticity of demand for onions is -0.25. Using the approximate reciprocal relationship, by how much would price be expected to fall if the quantity marketed rises by 5%?

  1. About 5%
  2. About 4%
  3. About 1.25%
  4. About 20%
Answer and working

D. About 20%

Price flexibility is about 1/elasticity = 1/(-0.25) = -4. A 5% rise in quantity gives about -4 x 5 = -20% change in price. Multiplying by the elasticity (1.25%) uses the wrong direction of causation.

Question 7 · medium

Monthly prices (currency units per kg) of a pulse are 20, 24, 18, 22, 26. Using the population standard deviation, what is the coefficient of variation?

  1. 14.37%
  2. 7.78%
  3. 36.36%
  4. 12.86%
Answer and working

D. 12.86%

Mean = 22. Squared deviations sum to 40; population variance = 8, SD = 2.828. CV = 2.828/22 x 100 = 12.86%. Using the sample SD (n-1) gives 14.37%, and using the variance instead of SD gives 36.36%. 7.78% inverts the ratio (22/2.828).

Question 8 · hard

A price series has a coefficient of variation of 20% and a linear trend regression with adjusted R-squared of 0.64. What is the Cuddy-Della Valle instability index?

  1. 12.8%
  2. 7.2%
  3. 12%
  4. 16%
Answer and working

C. 12%

CDVI = CV x sqrt(1 - adjusted R2) = 20 x sqrt(0.36) = 20 x 0.6 = 12%. Omitting the square root gives 7.2%; using R2 instead of 1-R2 gives 16%. 12.8% multiplies by R2 itself (20 x 0.64).

Question 9 · hard

A log-linear trend fitted to annual prices gives ln P = 3.2 + 0.0488t. What is the compound annual growth rate?

  1. 5.00%
  2. 4.88%
  3. 11.89%
  4. 105.00%
Answer and working

A. 5.00%

CGR = (e^b - 1) x 100 = (e^0.0488 - 1) x 100 = 5.00%. Reading b directly (4.88%) is only an approximation; treating the log as base 10 gives 11.89%. 105.00% forgets to subtract one from e^b.

Question 10 · medium

Wheat can be imported at a CIF price of US$ 250/t. The exchange rate is 84 currency units/US$, the tariff is 10% of CIF value, port charges are 800 currency units/t and inland transport to the consuming market is 1,500 currency units/t. What is the import parity price at that market?

  1. 23,100 currency units/t
  2. 23,300 currency units/t
  3. 25,400 currency units/t
  4. 20,800 currency units/t
Answer and working

C. 25,400 currency units/t

CIF in local currency = 250 x 84 = 21,000; tariff = 2,100; add port 800 and inland 1,500: 21,000+2,100+800+1,500 = 25,400 currency units/t. Leaving out the tariff gives 23,300; subtracting the handling costs (20,800) confuses import parity with export parity. 23,100 currency units/t adds the tariff but forgets port and inland charges.

A study plan for Agricultural Marketing & Price Analysis in ASRB NET and ARS / SMS / STO recruitment

This plan follows where our questions actually fall, so the time goes where the marks are likely to be. It is our reading of the syllabus, not the exam body's weighting.

  1. First, the heavy units (63% of the 30 questions): Seasonal and spatial price variation (10, 33%); Marketing efficiency (3, 10%); Agricultural exports (2, 7%); Marketing channels and price spread (2, 7%); Price commissions and parastatal marketing agencies (2, 7%).

    Read the manual chapters for these first and do every worked question you can find on them.

  2. Then the middle band: Regulated markets and marketing boards (2, 7%); Structure-conduct-performance paradigm (2, 7%); Agricultural price policy (1, 3%); Cooperative marketing (1, 3%); IT in agricultural marketing and electronic trading platforms (1, 3%).

    Aim for one sitting per unit, then mixed questions across them.

  3. Then the lighter units: Marketable and marketed surplus (1, 3%); Marketing finance (1, 3%); Marketing in a developing economy (1, 3%); Processing, storage and warehousing (1, 3%).

    Learn the definitions, classifications and standard numbers; these units are more often recalled than worked.

  4. Leave time for the hard ones: Price commissions and parastatal marketing agencies (2 hard of 2), Cooperative marketing (1 hard of 1), IT in agricultural marketing and electronic trading platforms (1 hard of 1).

    Come back to these after a first pass, untimed, and read every explanation, including for the options you rejected.

  5. Bank the easy marks: Agricultural price policy (1 easy of 1); Structure-conduct-performance paradigm (1 easy of 2).

    Do these early in revision so they are fast on the day.

  6. Finish timed. Sit the subject as a timed set without notes, mark it, and send each wrong answer back to its unit above.

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