What is Agricultural Economics?
What is Agricultural Economics? ABUS 101
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This 4 page Class Notes was uploaded by Melinda Notetaker on Friday January 29, 2016. The Class Notes belongs to ABUS 101 at California State University Chico taught by Jacob Brimlow in Winter 2016. Since its upload, it has received 24 views. For similar materials see Intro to Ag Business in Economcs at California State University Chico.
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Date Created: 01/29/16
January 27, 2016 What is Agricultural Economics? www.morningagclips.com Agriculture seeks Silicon Valley’s help Agriculture industry is attracting tech companies to the Salinas Valley *Recommend reading this source for better understanding and for your own personal thoughts of what this action can create room for Silicon and Salinas valley create space for 34 startups for technology companies Creates room for: Efficiency: better integrate technology and agriculture Increase demand for food and fiber (Population increase and income increase Opportunities for technology and Agriculture Technology can benefit Agriculture Profit (“to survive and thrive”) Agricultural Economics: is a *social science that deals with the allocation of scarce resources among competing alternative uses found in the production, processing, distribution, and consumption of food and fiber. *Social Science: the study of people Basic Skills of Agricultural Economists: Is to devise *rules for making decisions in an ever-changing, uncertain economic environment. *Understanding humans’ feelings, thoughts, and behaviors and how they affect choices and decisions of both producers and consumers Agricultural Economists cover more than just the activities of farmers or ranchers o Some economists may deal with issues of: Resource conservation Economics rests on three foundations: Scarcity: Without scarcity, there would be no need for an allocation system Every resource (ex. water, oil, time) is relatively scarce, meaning the availability of every resource is insufficient to satisfy all its potential users. o If we dig deep within ourselves to find all the things we ever wanted, there will not be enough of what we want to satisfy our personal wants Scarcity creates the need for a system to allocate the…. Choice: Choice is important, because without choices there is no decision to be made … Self-Interest: is what drives the consumer to seek more “stuff” at a lower price Drives the producer to produce as efficiently as possible- all activity is driven by self-interest Some things of self-interest could be displayed in a form of greed: doing for your own benefit Is self-interest a bad thing? o That is up to you to decide. In some ways it may be bad and some it may be good, it can be on either sides of the spectrum Five Basic Economic Decisions: Every economic system resolves around five basic issues: 1. WHAT to produce 2. HOW to produce it 3. WHEN to produce 4. FOR WHOM to produce 5. HOW MUCH to produce One form of an economic system is the Free Market or Price System Many producer and consumers are restricted by financial resources The farther the economic system leans toward the Price System the more freedom the producers will have to choose their own prices. o U.S. represents the free market system, though there still are certain laws, regulations, and rights that protect the consumer from misleading and unfair businesses along with preventing fraudulent activity. The other form is the Command System All decisions are made by a central planning agency or other administrative individual such as an absolute dictator or tribal chief. The closer the economic system is to the command system, the more controlling the environment for both producers and consumers would be because of certain laws, rules, and regulations by an individual in command. o An example of command system is North Korea (Communism), all their supplies and pricings are controlled (even media is controlled!) January 29, 2016 Correlation and Causation/causality Correlation: when two things happen at the same time Causation/causality: a direct relationship; one causes the other Advertisements use correlation, they show two different things at the same time to make you assume there is a causation o Ex. Beer commercials: the commercial will show the beer always in an ice bucket with people that are fit, tanned, happy, and on the beach These commercials want you to believe that beer causes this lifestyle; they want you to assume that you will have that same reality if you have that beer There isno proof that beer creates/causes that reality www.morningagclips.com 1.3 billion Chicken Wings for Super Bowl 50 The National Chicken Council Predicts Panthers’ Victory Based on Wing Consumption *recommend you read this online source for better understanding This is a correlation: It is stating that if there are more chicken wing sales for football team fans than their enemy on game day, than they will have a victory (chicken wing sales=victory/defeat) Statistics Many marketers claim that something may improve your life. They will show statistics to prove their claim. o Find the correlation of the statistic *Those highly positive (sky-rocketing!) statistics can be misleading o Ask questions of how they know these statistics: How did you get these statistics? Did you do any studies? Did you do experiments? Who are your sources of data? Ask yourself and research if their sources are credible There are many factors that can play into the statistics that many people don’t think of and that many advertisers don’t tell you: those factors are called lingering factors. Some lingering factors are: Location Age Race Sex Income Weather Etc. Cynicism: don’t believe anything anyone says Criticism: digs deeper to find answers, critical thinking (we’ve all heard that a million times!) There is a huge difference between cynicism and criticism (same goes for correlation and causation) People who are cynical tend to be: negative lazy, intellectually easier dismissive those that miss opportunities Those that are critics tend to be: Critical thinkers (of course!) Those that create better opportunities and decisions Open-minded Those that try to find the truth Those that find causation Don’t fall into the trap of correlation and cynicism!
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