Ageconomics 1
Terms
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- Anapplied social science that deals with how producers, consumers, and societies use scarce resources in the production, processing marketing, and consumption of food and fiber products.
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Agricultural Economics
- A branch of economics that focuses on what-is and what-would-happen-if questions and issues; does not involve value judgments or policy prescriptions to reach a particular objective.
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Positive Economics
- A branch of economics that focuses on determining what-should-be issues and questions. Unlike positive economics, it assigns specific values with specific goals or objectives.
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Normative Economics
- Branch of economics that focuses on the broad aggregates, such as the growth of gross domestic product, the money supply, the stability of prices, and the level of employment.
- Macroeconomics
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Branch of economics that focuses on the economic actions of individuals or specific groups of individuals.
- Microeconomics
- The separation of productive activities between persons or geographical areas in such a manner that none of these persons or regions is completely se
- Specialization
- The cost of producing a good as measured by the amount of a second good that must be forgone to release just enough resources to produce one addition
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Opportunity cost
- A finite quantity of resources that are available to meet society’s needs.
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Scarce Resources
- The value of food expenditures contributed by firms beyond the farm gate.
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Marketing Margin or bill
- Level of output per unit of input.
- Productivity
- Returns on capital invested in farm assets.
- Profitability
- Reflects what $1 today would have purchased in goods and services in a particular base period.
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Purchasing Power
- Defined by the income available for consumption and the prices that a consumer faces.
- Budget Constraint
- Personal income after the payment of tax obligations.
- Disposable Income
- As disposable income of a consumer increases, the percentage of income spent for food decreases if all other factors remain constant.
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Engel's law
- A graph of the locus of consumption bundles that provide a consumer a given level of satisfaction.
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Indifference Curve
- Marginal utility declines as more of a good or service is consumed during a specified period of time.
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Law of Diminishing Marginal Utility
- The consumption bundle that maximizes total utility and is feasible as defined by the budget constraint. The marginal utilities pe
- Consumer Equilibrium
- A shift in the demand curve generally caused by changes in the prices of complements or substitutes, income, and tastes and preferences.
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Change in Demand
- Refers to the change in quantity observed on the horizontal axis associated with a movement up or down the demand curve as opposed to a shift in the
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Change in Quantity Demanded
- This curve, along with the supply curve, determines the equilibrium price for a given commodity or service.
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Market Demand Curve
- Substitution of a product for another because the price of the former has declined or increased.
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Substitution Effect
- The connection or locus of all tangency points between budget lines and indifference curves. Each tangency identifies a point on t
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Price Consumption Curve
- A measure of the savings achieved by consumers at the current market price from the price they would have been willing to pay for a specific quantity
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Consumer Surplus
- The schedule that shows how many units of a good the consumer will purchase at different income levels, all other factors constant.
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Engel Curve
- A measure of the relative response of consumption of a good or service to changes in price.
- Own-price Elasticity of Demand
- A measure of the relative response of demand to income changes.
- Income Elasticity
- A measure of the response of consumption of a good or service to changes in the price of another good or service.
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Cross Price Elasticity
- Goods for which consumption rises (falls) when income increases (decreases).
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Normal Good
- Goods for which consumption falls (rises) when income increases (decreases)
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Inferior Goods