I. LIMITED RESOURCES IN AGRICULTURE
Land - is a natural resource in the production process of a product, such as rivers, minerals, and forests.
Workforce - is the physical and mental talents of individuals to produce goods and services. Need to determine the number of workers that will be used to carry out the production process.
Capital - is money spent to produce consumer goods and services such as machines, tools, and warehouse facilities.
Entrepreneurial Ability - is human talent that combines other resources to produce products, make strategic decisions and take risks. have skills and knowledge. manager (decision making), supervisor, subordinate.
II. ECONOMIC THEORY VS ECONOMIC MODEL
I) Economic Theory - evolved from hypotheses that obtained good results after continuous fact testing.II) Economic Model - is a brief description of how to use a combination of laws or principles.
SCIENTIFIC METHODS:
1) Observations and behavioral outcomes,2) Formulation of possible cause and effect explanations (hypotheses) based on observations,3) Test this explanation by comparing actual results and predictions, and4) Acceptance, rejection or modification of hypotheses.5) Continuous hypothesis testing.
III. AGRICULTURAL PRODUCTION ECONOMIC
1. The goals and objectives of the farm manager
2. The choice of output to be produced is a choice in relation to what should produce the land, labor, machinery and equipment available
3. Allocation of resources between outputs
4. Assumptions of risk and uncertainty
5. Competitive economic environment in which plantation companies operate
IV. AGRICULTURAL ECONOMIST FUNCTION
Agricultural economists are concerned with problems related to the use of resources in the production, processing, distribution, and consumption of products in food and fiber systems at the microeconomic level and at the macroeconomic level.
V. IDENTIFYING AND SELECTING STRATEGIES
Some alternative use for increased resources, will increase the complexity of managerial decisions. Therefore, the best plan or strategy must be selected. More resources and flexibility is a strategy in business.
VI. TACTICAL DECISION MAKING
Identify and identify problems or opportunities
Identify alternative solutions - as many alternative solutions can be taken
Collect data and information
Analyze alternatives and choose one - Choose the best
Monitor and evaluate results - data is taken and evaluated
Accept responsibility for those decisions - risks that may occur.
VII. CHARACTERISTICS OF DECISIONS
Uncertainty or possibility occurs
Reversibility (change or cancel)
VIII. THE DECISION MAKING ENVIRONMENT
Biological processes and weather
The laws of nature place limits on the decisions of managers
Fixed land supply
The land base is essentially fixed, making decisions about land use, sale, or acquisition is very important
Small size
Often one person serves as management and workforce
Perfect match
Producers are price takers
DefinitionThe limited available resources can be used as best as possible. Thus, economics is concerned with the use of available resources as best as possible to meet these limitless needs.
MUHAMMAD HARITH BIN SHUHAIMI (2020954367)
Wondershare EdrawMind
