Explain the relationships between inputs and outputs.
Explanation should include
- a definition of the law of diminishing returns
- a description of the relationship of adding an additional unit of input and the effect on output
- considerations related to aspects such as
- human capital
- equipment costs
- land costs
- capital investment.
Process/Skill Questions:
- What is a break-even analysis, and how is it applied in agricultural production?
- What is the law of diminishing returns?
- How would one evaluate profit, using the formula: marginal cost = marginal revenue?