(a) What is elasticity of demand? [2 marks] (b) Explain each of the following terms as used in agricultural production: (i) collateral: (ii) farm inventory ...

(a) Elasticity of demand

Elasticity of demand is the degree of responsiveness of the quantity of a commodity demanded to a change in one of the factors affecting demand, especially a change in its price. It is expressed as:

\[ \text{Price elasticity of demand} = \frac{\text{percentage change in quantity demanded}}{\text{percentage change in price}} \]

(b) Terms in agricultural production

• (i) Collateral: a valuable asset or property (such as land, buildings or a certificate of occupancy) that a borrower pledges to a lender as security for a loan, which the lender can take if the loan is not repaid.
• (ii) Farm inventory record: a record that shows a complete list of all the assets (property and stock) on the farm, together with their values, at a particular time.

(c) Three merits and three demerits of the retailer

Merits:

1. Sells produce in small quantities that consumers can afford.
2. Brings goods close to consumers in their localities.
3. Sometimes gives credit and useful information to consumers.

Demerits:

1. Charges higher prices, increasing the cost to the consumer.
2. Handles only small quantities, so the range of goods may be limited.
3. May sell inferior or adulterated produce and add to the number of middlemen who reduce the farmer's share.

(d) Two roles of each hormone in animal reproduction

• (i) Testosterone: (1) brings about the development of male secondary sexual characteristics; (2) stimulates the production of sperm and male sexual behaviour (libido).
• (ii) Progesterone: (1) prepares and maintains the uterus (womb) for pregnancy; (2) maintains pregnancy and prevents further ovulation, and prepares the mammary glands for milk secretion.

(e) Four ways of preserving fish

1. Smoking
2. Drying (sun-drying)
3. Salting
4. Freezing/refrigeration (canning also acceptable)