Agribusiness: Fundamentals and Applications Ch 2

Agribusiness: Fundamentals and Applications Ch 2

Name: _Mira Aryuni_______________ Score:____/20

1.    What are the differences between the definitions for economics and agricultural economics?

Economics is science that learn about how to produce, to distribute, to market and to consume a goods and service through scarce resources. Meanwhile agricultural economics is an applied science that learn about how to produce, to market, to consume product which is a food and fiber through scarce resources. The difference is situated on the kind of product that we produce.

2.    Select a product you use on a regular basis. Identify as many factors as you can that were used in making the product. Classify each factor as either a natural resource, human resource (labor), manufactured resource (capital), or entrepreneurship (management).

Product                      : Rice

Natural resource      : Land, seed, fertilizer, water

Human resource      : Labor

Capital                       : Machine, cultivation equipment, money, building, vehicle

Management                        : Owner, manager, staff

3.    Explain how specialization might affect the trade between Iowa and California.

As we know, specialization is focusing the use of resource on a specific task based on its strength. According net state that California produces almost all of the country's almonds, apricots, dates, figs, kiwi fruit, nectarines, olives, pistachios, prunes, and walnuts. It leads in the production of avocados, grapes, lemons, melons, peaches, plums, and strawberries. The most important vegetable crops grown in the state are lettuce and tomatoes.¹ Contrary, Iowa's top five agricultural products are corn for grain, hogs, soybeans, cattle and calves, and dairy products.² Because of that, both of them can do cross trading. It means California can purchase corn, soybean and dairy product form IOWA to fill their shortage. Iowa can purchase lettuce, tomatoes, grapes and other fruits from California that Iowa cannot produced.

1.    California economy (February 25, 2016) available at http://www.netstate.com/economy/ca_economy.htm (accessed August 27, 2017)

2.    IOWA economy (February 25, 2016) available at http://www.netstate.com/economy/ia_economy.htm (accessed August 27, 2017)

4.    The U.S. economy is a mixed economy, using capitalism and socialism. List 2 examples where you think the government should be involved in the economy and 2 examples where the government should not be involved. For each example note your reason why you support that position.

a.    Government involved: Controlling

Government should be involved in controlling economic process. This matter has purpose to keep balance between large and small company. So that there is not domination from one hand. The government as supervisor in economic process. The government can give a punishment to one hand that indicated make a bad thing.

b.    Government involved: Make upper limit and lower limit of price

The Government has a power to make price limit for a product so that there is not price monopoly from one hand. If there is not limitation of price for a product, the producer can make price monopoly (high price) furthermore if the producer is the only one. This case will give disadvantage for consumer for sure. In addition, if government don’t make lower limit of price so the larger company can sell the product with the cheapest price even below production cost to grab the consumer. This case will be a threat for smaller company. The smaller companies cannot sell the product with cheaper price than large company considering their production cost also high. If this case going continuously, the smaller companies will die.

c.     Government not involved: kind of product that we should produce

If government decide what product should be create it means government giving disadvantage either producer and consumer. The government make a limitation on producer creativity to make a product that suitable with consumer’s taste. If producer cannot make a product that consumer really want, the consumer cannot meet his/her satisfaction. The consumer has no choice.

d.    Government not involved: Career choice

Everybody is different. Human wants do everything that they love and passionate. Everybody has rights to choose. Nobody can force someone. The government should not decide for someone career. If someone doing something that they don’t like or advance, so the work cannot be doing properly. It will give bad impacts for the future. Contrary, if someone can choose what the job that they interested on so that he will doing that job properly. He will put some creativity to make his job better.

Definitions:

5.    Needs: Everything that should be exist and really crucial to daily living.

6.    Wants: Everything that beyond daily needs and not crucial to daily living. It just for satisfy us.

7.    Goods: everything that produced to satisfy consumer demand; everything that people buy

8.    Services: An activity done for others to get a wage or payment