Lec 7 - Components of farm business analysis

Question 1

Technical efficiency? eg’s?

Answer 1

Technical efficiency = outputs/inputs

eg’s. beef prod. per hectare, lambs pre ewe, consult per clinician

Question 2

Economic efficiency?

Answer 2

Economic efficiency = value of outputs/cost of inputs

Question 3

Common Efficiency KPIs?

Answer 3

output per limiting resource: (wool/hectare)
stocking rate: dse/ha
reproductive rates: lambing %

Question 4

T or F - land area is a good measure of business size

Answer 4

false - 5000 ha at Bourke may be a smaller business than 500 ha at Tooma

Question 5

Define economies of scale

Answer 5

factors which make it possible for larger firms to produce goods or services more cheaply

Question 6

define Indivisibility

Answer 6

the existence of minimum scale at which any technique can operate

Question 7

define division of labour

Answer 7

allows individuals to specialise in types of work at which they have a comparative advantage and allows them to acquire specialised skills