AGRICULTURAL ECONOMICS 



devoted to a small number of the composite units 

 of the other factors, the management may be said 

 to be intensive, and when a small amount the 

 management may be said to be extensive. The 

 proper degree of intensity of management is that 

 which yields the largest net profit per unit of 

 managerial activity, and this point will be reached 

 when the addition of another composite unit 

 would add to the total product no more than 

 enough to pay the costs of enlisting its coopera- 

 tion. This principle applies to the different fac- 

 tors severally as well as collectively. The amount 

 of land brought under one management may be 

 increased to advantage until the last increment 

 results in a net addition to the total product no 

 greater than the rent which must be paid to secure 

 the use of the land. The same proposition holds 

 for the other factors. But the problem still re- 

 mains as to the proportions which will exist be- 

 tween the three factors, land, capital-goods, and 

 hired laborers, when the amount of each of these 

 brought under one management is determined by 

 this rule. These proportions and especially the 

 amount of labor and capital-goods to be used 

 upon a given area of land may, with profit, be 

 considered in considerable detail. 



Let us first consider the proportions which 

 should exist between laborers and capital-goods 

 in this composite unit, and then try to ascertain 

 the proportions which should exist between land 



92 



