AGRICULTURAL ECONOMICS 



CHAPTER I 

 AGRICULTURAL ECONOMICS DEFINED AND DESCRIBED 



THE subject matter of Economics is found in the relations 

 arising among men in their efforts to satisfy their wants for food, 

 clothing, shelter, and the many conveniences and luxuries of life. 



Such a relation arises when one man has wheat to sell and 

 another wishes to buy wheat. Here the problem is that of 

 agreeing upon the price at which the wheat is to be transferred. 

 Other economic relations arise when the use of land is to be 

 secured either by lease or by purchase, when equipments are 

 to be purchased, and when labor is to be employed. In all 

 these cases the relation centers upon the question of price 

 fixing, i.e. the agreement upon a rental for land, a price for 

 equipment, and a wage for labor. These relations which focus 

 upon price determine in a large measure the character of the 

 work which men will do, what they will produce, and the methods 

 they will use in producing them. Thus it is, that choice of a 

 farm, choice of live stock and machinery, the choice of crops, 

 the size of farms, the grouping of farm enterprises, the intensity 

 of culture, and hundreds of smaller matters which arise from 

 day to day have to be settled in terms of the prices of things 

 used in production, that is, the cost, and the prices which can 

 be secured for the different articles which may be produced. 

 The farm manager, in deciding upon what to do and what not 

 to do to secure a maximum profit, bases his choices upon relative 

 costs and relative prices. 



There are those who look upon economic problems not as 

 problems of production, but problems of distribution, that is, 

 the problem of sharing the food, clothing, and shelter among 



