Agricultural & Food Sciences

Opportunity Cost is the value of the best alternative that is forgone when a choice is made. It is one of the most important concepts in economics because every choice involving scarce resources usually means giving up another possible use of those resources. In agriculture, Opportunity Cost applies to land, labour, money, machinery, water, time

Marginal Utility is the additional satisfaction or benefit a consumer receives from consuming one additional unit of a good or service. It answers a simple question: How much additional satisfaction does the next unit provide? Marginal Utility is fundamental to understanding consumer choice, Demand and how people allocate limited income among food and other products.

Utility is an economic concept used to represent the satisfaction, benefit or preference a consumer associates with goods, services or different possible choices. In Agricultural Economics, Utility helps economists understand why consumers choose particular foods and why farmers make different decisions when facing income, risk and uncertainty. Utility should not be confused with usefulness in

Producer Surplus is the economic benefit producers receive when the market price they obtain for a product exceeds the minimum amount they would have been willing to accept to supply it. It measures part of the economic reward producers receive from participating in a market. In Agricultural Economics, Producer Surplus is widely used to analyze

Consumer Surplus is the economic benefit consumers receive when they pay less for a product than the maximum amount they would have been willing to pay. In simple terms, it measures the difference between what a product is worth to a buyer and what the buyer actually pays. Consumer Surplus is an important concept in

Cross-Price Elasticity measures how the quantity demanded of one product responds to a change in the price of another product. It answers practical questions such as: If beef becomes more expensive, will consumers buy more chicken? If coffee becomes more expensive and consumers buy less coffee, what happens to Demand for coffee creamer? These relationships

Income Elasticity of Demand measures how the quantity demanded of a product changes when consumer income changes, other relevant factors remaining constant. It helps answer an important Agricultural Economics question: When people’s incomes increase or decrease, how does their Demand for particular foods and agricultural products change? Income Elasticity is important because economic development can

Price Elasticity of Supply measures how responsive the quantity supplied of a product is to a change in its price. It answers an important agricultural question: If a crop or livestock price changes, how much can and will producers change the quantity they supply? The Law of Supply tells us the expected direction of producer

Price Elasticity of Demand measures how responsive the quantity demanded of a product is to a change in its price. It answers a practical question: If the price of a food or agricultural product changes, how much will consumers change the quantity they buy? This concept is important because the Law of Demand tells us

Equilibrium Price is the market price at which the quantity of a product supplied equals the quantity demanded. It is sometimes called the market-clearing price because, in the basic competitive-market model, there is neither an inherent shortage nor an inherent surplus at this price. Equilibrium Price is closely connected with Market Equilibrium, Supply, Demand, Supply