Introduction to Agricultural Economics
AGEC 330

NORTH CAROLINA A&T STATE UNIVERSITY
DEPT. OF AGRICULTURAL ECONOMICS AND RURAL SOCIOLOGY

SPRING 1999

Instructor: Dr. Godfrey C. Ejimakor
Office: 154-B Carver Hall; Phone 910-334-7943.
Office Hours: 9 - 10am MWF; 11 - 12noon TR
Meeting Time: 10:00 - 10:50am, MWF.
Meeting Place: 111 Carver Hall

 

Course Objective: This course is designed to develop an understanding of the theoretical concepts and principles of economics as they apply to the food and agricultural industry. Emphasis is given to the application of economic principles in the production and consumption of food and fiber products. The institutions and organization of the agricultural/agribusiness complex, major farm problems and public policy issues that impact agriculture will be discussed.

 

Text: Cramer, Gail L., and Clarence W. Jensen. Agricultural Economics and Agribusiness, 7th ed., John Wiley, 1997.

 

Grading: Grades will be determined as follows:

Class Attendance/Conduct 10%

Midterm Exam. No 1 15%
Midterm Exam. No 2 15%
Midterm Exam. No 3 15%
Homework 20%
Final 25%

Total 100%

 

Course Syllabus and Study Guide:

I. Agricultural Industries:

A. Economics of Agriculture

Chap. 1. The role and importance of agriculture; the unique characteristics of agriculture; choices and decision-making in agriculture; the economics of agriculture.

B. Organization and Structure of the Agricultural Sector.

Chap.2 Farm business organization; cooperatives; Vertical coordination; types of farms; the agribusiness complex.

II. The economics of Demand and Supply of Agricultural Products:

  1. Consumer behavior and demand.

    Chap.3 Utility as a basis for demand; consumer choice and equilibrium; consumer demand and demand schedules; changes in demand; changes in quantity demanded; price and income elasticities of demand.

  2. Agricultural Production Decisions: Single Variable Input

    3. Chap.4 Input and Output Relationships. The production function. Diminishing marginal product; values and their relationships; net revenue maximization; adjustments to price changes.
  3. Agricultural Decisions: Two Variable Inputs and Alternative inputs; marginal rate of substitution; Least cost combination of inputs; production possibilities frontier; isorevenue curves; most profitable combination of enterprise production expansion path.

    Chap.5 Alternative Enterprise Selection.

D. Agricultural Production Decisions: Production Costs and Average costs and revenues; firm and market supply curves; supply and demand interaction; market equilibrium; price determination; consumer and producer surplus; price ceilings and floors; shortages and surplus.

    Chap.6 Market Supply.

III. Market Organization, Performance, Functions and Intervention.

    A. Market classification; perfect competition; the role ofprices; profits and losses; market efficiency.

    Chap.7

    B. Imperfect Competition and Regulation; monopoly; publicregulation; antitrust laws; cooperatives.

    Chap.8

    C. Agricultural Price and Income Policies. The farm problem; farm programs and their effects.

    Chap.11

    D. Types of Economic Systems. Free vs centrally controlled markets.

    Chap.15

    E. Marketing Agricultural Commodities. Marketing margins; futures markets; hedging; futures options.

    Chap.12

     

IV. Other Issues and Agricultural Institutions.

    A. Macroeconomics. National income accounts; Aggregate demand and supply; aggregate price and output; macroeconomic linkages to agriculture.

    Chap.9

    B. Agricultural Finance Institutions. Sources of farm credit; the farm credit system; federal land banks; federal intermediate credit banks; federal bank for cooperatives; Farmer's Home Administration; commodity credit corporation.

    Chap.10

    C. Natural Resources and Environmental Issues. Land, water and energy resources; compounding and discounting; externalities in production and consumption.

    Chap.13

    D. International Economic Issues. Agricultural trade; tariffs and quotas; trade balance; balance of payments; economic community; customs unions.

    Chap.16

    E. Food Supply and Population Growth. Malthus; World food needs.

    Chap.17

    F. Rural Development Issues. Values of farm people; rural development and agriculture.

    Chap.14