ICAR AIEEA (PG): Master's entrance, Veterinary Science and Animal Sciences · India · NTA for ICAR
Original practice questions written to the published syllabus · not past papersThe economics of livestock production and trade: costs, markets, cooperatives, credit, insurance, trade rules and project appraisal.
In the exams: EGEL Plus farm administration 10; NAVLE practice management (within professionalism and practice management 7%)
How our questions for ICAR AIEEA spread across the units of Livestock Economics, Marketing & Business Management. Difficulty: 24 easy, 28 medium, 3 hard.
| Cost of production | 8 | |
| Project appraisal | 8 | |
| Production economics | 6 | |
| Livestock marketing | 6 | |
| WTO and the SPS Agreement | 6 | |
| Farm size and scale | 5 | |
| Livestock credit | 5 | |
| Intellectual property rights in livestock | 5 | |
| Cooperatives | 3 | |
| Livestock insurance | 3 |
Choose an answer, then open the working. Each explanation says why the right answer is right and why the others are not.
The long-run average cost curve of a livestock enterprise is best described as:
B. The envelope of the short-run average cost curves for each possible size of unit
In the long run every input is variable, so the farmer can choose the size of unit; the LRAC traces the lowest short-run average cost attainable at each output and envelopes the SRAC curves. In the long run all costs are variable, not fixed.
On a dairy farm, which of these is a fixed cost in the short run?
A. Depreciation on the cattle shed
Fixed costs do not change with output in the short run: depreciation, interest on fixed capital, rent, insurance. Concentrate, AI and casual labour rise and fall with the number of animals and the output, so they are variable.
A broiler batch starts with 1,000 chicks at 40 currency units each. Mortality is 4 per cent and survivors are sold at 2.2 kg live weight. FCR is 1.7 on the weight sold, feed costs 38 currency units per kg, other variable costs are 15,000 and the batch's share of fixed costs is 12,000. What is the cost per kg live weight?
D. 96.32 currency units
Birds sold = 960; live weight = 960 × 2.2 = 2,112 kg; feed = 2,112 × 1.7 = 3,590.4 kg × 38 currency units = 136,435. Total = 40,000 + 136,435 + 15,000 + 12,000 = 203,435 currency units; ÷ 2,112 kg = 96.32 currency units. 99.02 currency units applies the FCR to 1,000 birds that never all reached sale; 211.91 currency units is cost per bird, not per kg; 90.64 currency units leaves out fixed costs.
The price spread for a livestock product is made up of:
A. Marketing costs plus the margins of the intermediaries
Price spread = consumer price − producer price, which equals the marketing costs incurred (transport, processing, packaging, losses, fees) plus intermediaries' margins. It is not the producer's cost structure, and it covers the whole chain, not only one stage.
Which of these is NOT one of the International Co-operative Alliance's seven cooperative principles (1995)?
C. Distribution of surplus in proportion to the share capital each member holds
The ICA principles are voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training and information; cooperation among cooperatives; and concern for community. Surplus goes to members in proportion to their transactions (patronage), and compensation on capital is limited.
The World Trade Organization came into being on:
B. 1 January 1995
The WTO began on 1 January 1995 at the end of the Uruguay Round. GATT dates from 1947-48; the Uruguay Round was launched in 1986; the Doha Round began in 2001.
Under the WOAH Terrestrial Code, compartmentalisation means recognising a distinct health status for:
B. A subpopulation defined by a common biosecurity management system, such as an integrated poultry company
Compartmentalisation is defined by management and biosecurity, not geography. Zoning (regionalisation) is defined geographically. National vaccination and quarantine stations are separate tools.
Registration of an indigenous cattle breed in a national breed register, reported to FAO's DAD-IS, gives:
B. Official recognition of the breed and its home tract, not an exclusive property right
Breed registration documents and recognises a breed, its characteristics and home tract and supports conservation and benefit-sharing claims; it does not confer patent, trade mark or GI rights or restrict where the breed can be kept.
A dairy project costs 1,000,000 currency units now and yields net cash flows of 200,000, 300,000, 320,000, 320,000 and 320,000 in years 1 to 5, plus a salvage value of 150,000 at the end of year 5. What is its NPV at a 12 per cent discount rate?
C. 115,556 currency units
PV = 200,000/1.12 + 300,000/1.12² + 320,000/1.12³ + 320,000/1.12⁴ + 470,000/1.12⁵ = 1,115,556 currency units; NPV = PV − 1,000,000 = 115,556 currency units. 610,000 currency units is the undiscounted surplus; 30,442 currency units leaves out the salvage value; 1,115,556 currency units forgets to subtract the investment.
Why is the payback period a weak criterion for appraising a livestock project?
A. It ignores the time value of money and every cash flow after the investment is recovered
Payback counts years to recover the investment with undiscounted cash, so it ignores timing within that period and all later returns, penalising long-gestation livestock projects. It uses no discount rate, works with unequal flows by cumulation, and often agrees with NPV.
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