Under-performance Definitions and Costs Flashcards
What is productivity?
Measure of efficiency of the production system and is represented as a quantitative term of the outputs divided by the inputs
How is productivity calculated?
Total value of outputs per unit of time/total value of inputs per unit of time
What factors should be included when calculating the effect of a disease on productivity?
Compare the determined losses caused by a disease with costs of reaching a new disease status
What is required to achieve maximum returns?
Knowledge of agricultural practices and how to allocate resources
What affects production?
Inputs - important not to forget time as an input
What does the law of diminishing returns state?
If increasing amounts of one input are added to a production process while all other inputs are held constant the amount of output added per unit of variable input will eventually decrease
What can be derived from the product function?
Average physical product
Marginal physical product
Elasticity of production
What occurs during stage I of production?
Total production is increasing at an increasing rate
Productivity is increasing during this stage
What happens at the end of stage I and beginning of stage II?
Productivity changes from an increasing rate to a decreasing rate
What occurs during stage II of production?
Production of the output continues to increase but at a diminishing rate
When is the efficiency of using a variable input at its greatest?
Where stage II begins
When is efficiency of using the fixed inputs greatest?
Where stage II ends
Where does the optimal use of all inputs lie?
Somewhere in stage II depending upon the inputs costs and output prices
What occurs at the end of stage II and beginning of stage III?
Production of output reaches its maximum point
What occurs during stage III?
Production of output declines
