THE PROPORTIONS OF THE FACTORS OF PRODUCTION 14 1 



four shows the point of maximum average gross returns which 

 would yield maximum return per unit of outlay where no rent 

 had to be paid. Column five shows the net return per dollar 

 of expenditure after deducting a five dollar rent. It will be 

 noted that the payment of rent tends to force the intensity of 

 culture to a much higher point. Note also that the degree of 

 intensity for farmer B is the same in columns three and five ; 

 whereas the superior farmer would act in one way if he followed 

 the first theory and in another way if he followed the second 

 theory. 



It may be well at this point to devote a few lines to the 

 assumption, that, within the limits of the variations in intensity 

 of culture which is likely to exist in the production of a given 

 crop, the same amount of managerial activity is required per 

 composite unit composed of the two factors, laborers and equip- 

 ment, without regard to the area of the land on which it is 

 employed. 



In general, we believe this assumption to be very near the 

 truth. In the production of corn, for example, the amount of 

 managerial activity required for each laborer with the team and 

 tools which are used by him would be the same whether thirty 

 acres of the crop were cultivated three times, or the same 

 laborer and capital-goods were used in cultivating twenty-two 

 and one-half acres of corn four times. Certainly if one must 

 choose between this assumption and the assumption that the 

 same amount of managerial activity is required for each acre 

 of land, regardless of the intensity of culture, there is little 

 question as to the choice. It is doubtless true that one man can 

 superintend the operations of more laborers and capital-goods 

 when they are brought together under one roof as in a large 

 manufacturing plant than when they are distributed over a vast 

 area of land ; but on the farm and in the production of a given 

 crop we believe that, as a rule, the demand upon the time and 

 energy of the manager, per composite unit of the two factors, 

 laborers and capital-goods, will remain practically the same 

 regardless of the area on which such unit is expended. We 

 shall proceed, therefore, upon this assumption in our attempt to 



