Ii8 AGRICULTURAL ECONOMICS 



To illustrate the sense in which the term capacity is here used, 

 assume that a given farmer, with a given outfit of horses, tools, 

 and other equipment, can operate 80 acres of "A" grade land 

 or 100 acres of " B " grade land, farming either piece to the 

 proper degree of intensity of culture. This implies that " A " 

 grade land has greater capacity for absorbing labor and equip- 

 ment than " B " grade land. Each acre of the " A " grade 

 land requires 1^ per cent of the labor and equipment in question 

 while each acre of " B " land absorbs only 1 per cent, which 

 means that the capacity of "A" grade land is one-fourth or 

 25 per cent greater than that of " B " grade land. 



To illustrate the idea of efficiency, assume that a given farmer 

 with a given outlay for labor and equipment can secure a prod- 

 uct worth $1800 on " A " grade land and a product worth $1600 

 on " B " grade land. Under these conditions the " A " grade 

 land would be said to have a higher degree of efficiency than the 

 " B " grade land. The difference in efficiency would be meas- 

 ured in terms of the difference in the product per unit of outlay. 

 One hundred per cent of outlay yields $1800 in one case and 

 $1600 in the other; $1800 is 12^- per cent greater than $1600, 

 hence " A " grade land may be said to be 12^ per cent more 

 efficient than " B " grade land. For further illustration see 

 the problems at the end of this chapter. 



One should not be confused by the fact that a given factor 

 may have high capacity or efficiency in terms of one other factor 

 and low capacity or efficiency in terms of another. For ex- 

 ample, a gang plow may have high capacity in terms of horses 

 and low capacity in terms of men. The same plow may have 

 high efficiency in terms of men and low efficiency in terms of 

 horses. Neither should one be confused by the fact that land 

 with high capacity may have low efficiency and vice versa, 

 e.g. heavy clay land may require much more labor per acre 

 than a silt loam and for this reason, though the crops be larger, 

 the product per unit of labor, i.e. the efficiency, may be smaller. 



Variation in the economic efficiency of land was emphasized 

 by Ricardo ; variation in the efficiency of managers was elabo- 

 rated by Walker. Clark called attention to the variation in 



