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Unformatted text preview: 1-16-08 Chapter 1 What is Agricultural Economics? Scarce Resources o Natural and Biological Resources Water, land, trees o Human Resources Labor o Manufactured resources Capital, equipment Resource Scarcity forces consumers and producers to make choices Opportunity Cost an implicit cost associated with economic decisions; calculated as the possible profit of next best alternative Specialization comparative advantage and the basis for trade (Kansas wheat, Idaho potatoes and Florida oranges) Individual decisions maximization of consumer utility and producer profits Societal decisions production possibilities given existing resources (guns vs. butter); government vs. domestic Total Economic Cost production cost + opportunity cost Economics the allocation of scarce resources among competing ends, minimizing & maximizing Agricultural Economics food and fiber sector of economics, "social science" Microeconomics individual entities person, farm, consumers as individuals Macroeconomics overall broad aggregates of the economy Positive objective Normative subjective "should be, ought to be" Production, Marketing, Resources, Financing sub-disciplines of what an agricultural economist does Marginal Analysis meaning change ...
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- Spring '08