Under-performance Definitions and Costs Flashcards Preview

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Flashcards in Under-performance Definitions and Costs Deck (23):
1

What is productivity?

Measure of efficiency of the production system and is represented as a quantitative term of the outputs divided by the inputs

2

How is productivity calculated?

Total value of outputs per unit of time/total value of inputs per unit of time

3

What factors should be included when calculating the effect of a disease on productivity?

Compare the determined losses caused by a disease with costs of reaching a new disease status

4

What is required to achieve maximum returns?

Knowledge of agricultural practices and how to allocate resources

5

What affects production?

Inputs - important not to forget time as an input

6

What does the law of diminishing returns state?

If increasing amounts of one input are added to a production process while all other inputs are held constant the amount of output added per unit of variable input will eventually decrease

7

What can be derived from the product function?

Average physical product
Marginal physical product
Elasticity of production

8

What occurs during stage I of production?

Total production is increasing at an increasing rate
Productivity is increasing during this stage

9

What happens at the end of stage I and beginning of stage II?

Productivity changes from an increasing rate to a decreasing rate

10

What occurs during stage II of production?

Production of the output continues to increase but at a diminishing rate

11

When is the efficiency of using a variable input at its greatest?

Where stage II begins

12

When is efficiency of using the fixed inputs greatest?

Where stage II ends

13

Where does the optimal use of all inputs lie?

Somewhere in stage II depending upon the inputs costs and output prices

14

What occurs at the end of stage II and beginning of stage III?

Production of output reaches its maximum point

15

What occurs during stage III?

Production of output declines

16

What is the classical production function?

Graph of inputs against outputs

17

What is the economic optimum?

Relates total value product to the amount of input and the total costs to the amount of output

18

What are the three different types of constraints that might be preventing optimum production?

Resource constraints - intervention expensive in relation to benefits
Technology constraints - animal handling facilities/diagnostics
Information constraints

19

What are the different things that may be important to the livestock owner?

Profit maximisation
Stability of income
Social status

20

What is required for an economic optimum?

Inputs to a livestock enterprise which have costs assigned
Outputs produced for a market where they are values at monetary prices

21

What is the economic optimum?

Profit maximisation - what the farmer will work towards

22

What is the break-even point?

Total revenue = total costs

23

What is the technical optimum?

Maximum amount of production