CAPITAL-GOODS A FACTOR IN PRODUCTION 21 



13. Must the size of the man, the size of the machine, and the 

 size of the farm be adjusted to each other? What difficulties does 

 this present ? How can they be met ? 



14. Should the different forms of capital-goods be adjusted with 

 reference to each other ? What is the result if they are not ? 



15. What factor is often neglected in this apportionment of the 

 farm capital ? Why is this so ? What results follow ? 



16. Does the productivity of the various capital-goods vary 

 exactly in accordance with their market price? Are these dis- 

 crepancies sometimes large? Illustrate. Does this cause a par- 

 ticular importance to attach to the selection of the particular article 

 to be purchased ? 



17. Are farmers as a rule shrewd buyers ? stingy buyers ? lavish 

 buyers? gullible buyers? intelligent buyers? Try to assign the 

 reasons in each answer that you give. 



18. Is the buying function of the farmer becoming constantly 

 more important ? Why ? More difficult ? Why ? 



19. How can the farmer protect himself or be protected in this 

 regard? See what activities your state undertakes along this line. 



20. What is meant by depreciation ? Can this be reduced in the 

 case of most American farms ? How ? 



21. Can depreciation be entirely eliminated ? Should the farmer 

 take account of the actual rate of depreciation of capital-goods in 

 figuring his profits and planning his future enterprises ? Show why. 



22. Do we expect capital in the long run to maintain itself? 

 How ? To increase in amount ? How ? 



23. Is the process of replacement or further accumulation an 

 automatic one ? What part must the farmer take ? 



24. In general, do we expect farmers to supply the capital for the 

 agricultural industry or do we expect them to use others' capital? 

 What is necessary if they are to secure a supply of capital from out- 

 side sources ? Must the one who supplies such capital know that his 

 money is safely employed ? that it is profitably employed ? What 

 does this require of the farmer ? 



25. Explain the relation of insurance to the question of capital 

 conservation. Is insurance or prevention better ? Does the system 

 of insurance tend actually to reduce the amount of losses ? How ? 



PROBLEMS 



1. "There is an important difference between land and capital- 

 goods in that when more capital-goods are wanted it is usually the 

 more productive forms which are made, while an increase in the 

 amount of land under cultivation usually requires that less productive 



