Module 4: Agricultural Production


Before we talk about markets, and supply and demand, we need to learn about the relationship between inputs – what we use to build, make or grow goods and services, and outputs – the goods and services we desire.  Because agricultural products are very closely related to the environment, we will also look at production through the lens of sustainability and how production is related to sustainable economies.

Think about all the goods and services you purchase and use.  Where do they come from?  How do producers make them and make decisions about how much to produce and sell, how best to combine raw materials, and the effects of adopting different kinds of technologies?  It sounds pretty complicated, but we will use a model to make sense of how things fit together.

In this module we are going to determine how much of an input to use in the production process, how much output can be produced by varying the inputs, and how to make decisions at the margin.  Finally, we will explore what makes total production increase or decrease.

Learning Objectives

Upon completion of this module, you will be able to:

  1. Explore the many products of agriculture
  2. Explain how inputs to production are related to outputs (products)
  3. Demonstrate numerically how to measure average and marginal production
  4. Identify the factors that affect productivity
  5. Evaluate the effects of changes in innovation and technology

Module Instructions

For this module you are required to:

  1. Read the module
  2. After you read the module, please watch the TEDex Talk by Vijay Kumar: The future of flying robots regarding precision agriculture. URL:

Key Terms and Concepts

  • Average Physical Product
  • Capital
  • Ceteris paribus
  • Decreasing returns to scale
  • Factors of production
  • Increasing returns to scale
  • Inputs
  • Labour
  • Land
  • Marginal Physical Product
  • Negative returns to scale
  • Output
  • Production Function
  • Raw materials
  • Technology