TY - BOOK AU - Hill,Berkeley AU - TI - An introduction to economics: concepts for students of agriculture and the rural sector SN - 9781800620063 U1 - 330.024 23 PY - 2021/// PB - CABI KW - Economics KW - Agriculture KW - Economic aspects N1 - Includes bibliographical references and index; An Introduction to Economics, 5th Edition Copyright Contents Preface Acknowledgements 1 What is Economics? Introduction – the Essence of Economics Opportunity Cost Scarcity What is an Economic Problem? Objectives of choice The Mechanism of Allocating Scarce Resources The Scientific Approach to Economics Problems Faced by Scientific Economists Path dependency Cause-and-effect relationships If a theory is shown to be valid, will it always be valid? Conclusion Exercise on Material in Chapter 1 2 Explaining the Behaviour of Individuals: Theory of Consumer Choice Introduction – the Concept of Utility The Margin Free Goods Theories of Consumer Choice Utility Theory of Consumer Choice Objections to the Utility Theory An Indifference Theory of Consumer Choice Income effect Price effect Demand, Marginal Utility and Consumer Surplus ‘Lumpy’ commodities The Stable and the Unstable Equilibrium Exercise on Material in Chapter 2 3 Demand and Supply: the Price Mechanism in a Market Economy Introduction Demand and supply curves The Theory of Demand Household and market demand Factors affecting demand How demand for a commodity varies with the price of that commodity What determines the sensitivity of the quantity demanded to price? Significance of price elasticity of demand (EDp ) to agriculture How demand for a commodity varies with the income of consumers Income elasticity of demand: quantity and expenditure measures Engel’s Law Significance of income elasticity of demand (EDy) to agriculture How demand for a commodity is affected by changes in price of competitive and complementary goods Competitive goods Complementary goods How demand is affected by tastes of consumers Additional factors influencing market demand Shifts along the demand curve and shifts of the whole demand curve for a commodity Theory of Supply The meaning of supply, and factors that determine it How the supply of a commodity changes with changes in that commodity’s price What influences the elasticity of supply? Elasticity of supply with rising and falling prices How the supply of a commodity depends on the prices of all the other commodities which are within th How the supply of a commodity depends on the prices of factors of production How the supply of a commodity depends on the state of technology How the supply of a commodity depends on the goals of firms Notes Exercise on Material in Chapter 3 4 Markets and Competition Introduction Functions of the Price System Imperfect Competition in Markets – Markets that are Not ‘Perfect’ The Individual Producer in Perfect Competition The Perfectly Competitive Industry A Firm Operating under Imperfect Competition Arguments against monopoly Arguments for monopoly Use of Monopoly Power in Agriculture Discriminating monopoly A Monopsonist – the Single Buyer Oligopoly and Oligopsony Price Movements in Agriculture The long-term trend Medium-period booms or slumps Price cycles Seasonal price variations Exercise on Material in Chapter 4 5 Production Economics: Theory of the Firm Introduction – the Scope of Production Economics Questions facing the entrepreneur Major relationships studied in production economics Optimizing the Factor–Product Relationship Diminishing returns What is the most profitable level of fertilizer to use? Product and value product The most profitable level of input The ‘total’ approach The ‘marginal’ approach Changes in costs and prices How many optima are there? An alternative approach to optimizing the factor–product relationship The optimum level of output Price and cost changes Reconciling the methods of optimizing the factor–product relationship Optimizing the Factor–Factor Relationship Cost and the optimum combination of inputs Changes in the price of inputs: price substitution effect The effect of expanding the scale of operation Optimizing the Product–Product Relationship Revenue and the optimum combination of products Changes in relative prices of products Straight line iso-resource curves Complementary products Time and Scale of Production Fixed costs and variable costs What is the lowest price at which beer will be produced? Economies and diseconomies of scale Sources of economies of scale Disadvantages of large-scale production Is there an optimum scale of operation? Change in the Supply of Farm Products – Technological Advance Technological advance Impacts of advances in technology on the three central relationships Types of innovation seen from the farm level Implications for the agricultural industry Implications for the national economy Industry, regional and national consequences of technological advance The ‘treadmill’ of technological advance Rates of diffusion of new technology Information Uncertainty Capital aspects Management requirements Factor and product pricing Model of the process of innovation by farmers Farmers as fast or slow adopters The future direction of technological change Note Exercise on Material in Chapter 5 6 Factors of Production and their Rewards: Theory of Distribution Introduction The nature of production Specialization and exchange Classification of factors of production Land as a Factor of Production Capital as a Factor of Production Capital in the process of economic development Labour as a Factor of Production Entrepreneurship as a Factor of Production The origins of risk and uncertainty Difference between risk and uncertainty Avoidance of risk and uncertainty Mobility of the Factors of Production and Unemployment Occupational mobility Geographical mobility Unemployment of the Factors of Production Allocation of the Factors of Production and their Rewards Demand and supply of factors of production Dynamic and equilibrium differentials Economic rent in the reward to factors of production Normal profits, surplus profits and monopoly profits The functions of profit Exercise on Material in Chapter 6 7 Market Failure: Some Problems of Using the Market to Allocate Resources Introduction Adam Smith and the ‘invisible hand’ The Value Judgements of Society Imperfect Competition Monopoly Transaction Costs Externalities Associated with Production and Consumption Public goods Imperfect Knowledge by Consumers Macroeconomic Reasons for Intervening in the Market System Exercise on Material in Chapter 7 8 Macroeconomics: the Workings of the Whole Economy Introduction The Circular Flow of Income The multiplier The Level of Aggregate Demand Determining the equilibrium level of national income Policies to control unemployment Full Employment and the Longer Term Inflation The Quantity Theory of Money Economic Growth The Costs of Economic Growth Exercise on Material in Chapter 8 9 International Trade Introduction Diversity of resources between countries Theory of Comparative Advantage Trade in surpluses Comparative and Absolute Advantage Limits of specialization Geometrical representation Extension of the simple model Many countries Many commodities Transactions Involving Currencies Flexible exchange rates Monetary Union Assumptions in the Theory of Comparative Advantage Static or dynamic conditions Full employment of resources Distribution of the gains from trade Arguments put in support of trade restrictions To protect against competition from cheap labour countries To prevent dumping To raise revenue For retaliation To ‘export’ unemployment For social or security reasons Balance of Payments Monetary Matters Government manipulation of the trade balance and exchange rates Exercise on Material in Chapter 9 10 Government Policy for Agriculture and Rural Areas Introduction Why do governments get involved with the economy? The Policy Process 1. Problem formulation 2. Policy formulation 3. Policy implementation 4. Policy effect Government, Agriculture and Rural Areas Agriculture and general policy aims Policy for rural areas Policies designed specifically for the problems of agriculture Policy in Practice Some tools of market intervention Quota - quantity restriction Other policy instruments in use Agri-environmental policy instruments The Future Nature of Agricultural and Rural Development Policy Exercise on Material in Chapter 10 Appendix 1 Essay Questions Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Appendix 2 Suggested Answers and Explanations for the Exercises following each Chapter Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 References Suggested Further Reading General texts to supplement all chapters of this book Texts specific to the economics of agriculture Farm production economics The EU’s Common Agricultural Policy and public decision making The policy process Index Back Cover ; Also issued in electronic format N2 - "A simple but effective introduction to economics. Fully updated and revised, this fifth edition covers the impacts of Brexit, animal welfare, sustainable agriculture, and the importance of natural, social and cultural capital on agricultural economics. It is an invaluable learning tool for students of agriculture, economics and related sectors"-- ER -