AGRICULTURAL ECONOMICS 



average net returns per unit employed, in the 

 same way as the line of average gross returns was 

 drawn. This new line of averages will reach the 

 line of maximum net returns per unit when the 

 line A Z P' crosses the line A I B. The point Z 

 will be one-third of the distance from X' to X and 



FIG. 2 



neither to the right nor to the left. This means 

 that the point of maximum net returns is reached, 

 in the case of a share tenant, with the application 

 of the same number of units which yield the larg- 

 est average gross product. 



Other things remaining the same, how will a 

 change in wages and interest influence the inten- 

 sity of culture ? Suppose that wages and interest 

 fall twenty per cent. ; will it then pay the farmer 

 to invest more units per acre? If the rent should 

 remain the same as before the reduction in wages 

 and interest, and if the foregoing reasoning with 

 regard to the proper intensity of culture be true, 

 the degree of intensity in terms of quantities of 

 labor and capital-goods which would yield the 

 largest net return would not change; but the ex- 



no 



