final Flashcards
supply curve
tells how much will be supplied
elasticity of demand for food products in ag?
inelastic
opportunity cost
forgone opportunities that have to be sacrificed by doing something rather than something else
- what are you giving up by making these choices?
specialization
focusing resources on a specific task. ie producers chasing to buy feed or grow their own.
economics - consumers
want to maximize satisfaction
choices- how they allocate time, what they purchase
constraints- time
economics- producer
want ti maximize profit
choices- what and how they produce
constraints- economy, pandemic
economics- government
to get re- elected and maximize well being
choices- programs to implement
constraints - economy.
microeconomics
focused on individuals or groups
macroeconomics
focuses on broad aggregates, money supply, bank and inflation rate
positive economics
facts, testable
negative economics
ought to be opinionated
capitalism
- free market, individuals own resources, closed market
socialism
centrally planned, resources owned collectively, mostly government
types of value created through supply chain
time, form, place.
role of markets in adding value in supply chain
- exchange functions (forming prices)
- physical functions (store and transport goods)
- enabling functions (standardizes)
- market info (process +/-)
- risk bearing (transfer from themselves to someone who can assess them)
food dollar
goes down with more processing. large % for egg farmers, small for cash crop. little value added, higher farmer share
how farmer share correlates to the country
lower the share, better off country, spending less on food allows to spend more on other resources.
firm
a business organization that combines or transforms resources into goods or services for sale to make a profit
sole proprietorship
one individual owns it all, used to be dominant in ag
partnership
2 or more people own
corporation
owned by shareholders, means owners have limited liability, allows aid in transfer from one gen to the next
cooperative
shareholders w a say in the operation
production function
firms use technology/production processes to transform resources into goods and services. purely technical relationship
production function inputs
Capital - K, labour - L, materials - M
production function outputs (Q)
service or physical product
short run
can not change at least 1 input
fixed input
can not be changed in the short run
variable input
can be changed readily by the firm
long run
period for your business so all inputs are varied
technological revolutions in ag
mechanical - animals replaced by machines
green - intensification of inputs
biotech - GMOs
data - precision ag
isoquant
curve representing input combos that produce same output
going NW has higher output, SW has less output
3 stages of production
- marginal product >avg product
- avg product is increasing
- marginal product >avg product
- where marginal product =0
- marginal product is -‘ve, more input lowers output
Thomas malthus
predicted starvation and wars over food bc of increase in population
norman borlaug
big in green revolution, increased yield by cross breeding to reduce disease and increase yield
Paul ehrlich vs Julian simon
Paul was doomsdayer, Julian doomslayer, bet that price of metals would increase over time with demand but they did not, good I think?
efficiency
static concept, who well are you doing, comparing on another
productivity growth
how things change for firms over timw
ted Shultz
agricultural economist who won the Nobel prize for economics
what increases supply?
increasing area, increasing input, use better varieties
breakeven price
when revenue = cost
why examine costs
determine how to produce a certain amount of output efficiently
technically efficient
on the front of the production or export
economically efficieny
minimizing the cost of producing the given level of output
explicit costs
direct out of pocket payments for inputs that firms use in production
implicit costs
dont exactly have a price associated with them. ie time
sunk costs
can not be recovered
minimizing cost to produce
needs info on technology and input costs/ budget
isocost line
combo of inputs that require the same expenditure
budget increases, line moves out. vice versa
