Agriculture Economics Agriculture Economics and the American and the American

EconomyEconomy

Chapter 2Chapter 2

Objectives:Objectives:

Define Economics.Define Economics. Explain three major components of Explain three major components of

economics.economics. Discuss three basic economic Discuss three basic economic

questions.questions. Explain six types of economic systems.Explain six types of economic systems. Discuss economics from a historical Discuss economics from a historical

perspective.perspective. Discuss the role of government versus Discuss the role of government versus

individuals in the economic system.individuals in the economic system.

Objectives cont.’dObjectives cont.’d

Describe the characteristics of the Describe the characteristics of the American economy.American economy.

Differentiate between Differentiate between macroeconomics and microeconomics.macroeconomics and microeconomics.

Differentiate between positive and Differentiate between positive and normative economics.normative economics.

Explain agricultural economics.Explain agricultural economics.

IntroductionIntroduction

Today’s world is complex and Today’s world is complex and continually changing. The successful continually changing. The successful agribusiness manager must possess agribusiness manager must possess a basic understanding of economic a basic understanding of economic principles to react to these changes. principles to react to these changes. To understand agricultural To understand agricultural economics, the agribusiness economics, the agribusiness manager must first understand manager must first understand basic economic principles. basic economic principles.

Definitions of Definitions of EconomicsEconomics

There are many definitions of There are many definitions of economics. Consider each of the economics. Consider each of the following definitions, look for key words following definitions, look for key words and phrases, and then form your own and phrases, and then form your own definition. definition. – Economics is the study of allocation of scarce Economics is the study of allocation of scarce

resources among competing alternatives.resources among competing alternatives.– Economics is the study of how individuals Economics is the study of how individuals

and countries decide how to use scarce and countries decide how to use scarce resources to fulfill their wants.resources to fulfill their wants.

– Economics is the “study of how society Economics is the “study of how society allocates scarce resources and goods.”allocates scarce resources and goods.”

– Economics is “the science of allocating Economics is “the science of allocating scarce resources (land, labor, capital, scarce resources (land, labor, capital, and managements) among different and managements) among different and competing choices and utilizing and competing choices and utilizing them to best satisfy human wants.them to best satisfy human wants.

– Economics “is a study of how to get Economics “is a study of how to get the most satisfaction for a given the most satisfaction for a given amount of money or to spend the least amount of money or to spend the least money for a given need or want.”money for a given need or want.”

– Economics is the study of how scarce Economics is the study of how scarce resources are transformed into goods resources are transformed into goods and services to satisfy our most and services to satisfy our most pressing wants, and how these goods pressing wants, and how these goods and services are distributed.and services are distributed.

– Economics is “the study of the decisions Economics is “the study of the decisions involved in producing, distributing, and involved in producing, distributing, and consuming goods and services.”consuming goods and services.”

– Economics “is a social science that Economics “is a social science that studies how consumers, producers, and studies how consumers, producers, and societies choose among the alternative societies choose among the alternative uses of scarce resources in the process uses of scarce resources in the process of producing, exchanging, and of producing, exchanging, and consuming goods and services.”consuming goods and services.”

– Economics is “concerned with Economics is “concerned with overcoming the effects of scarcity by overcoming the effects of scarcity by improving the efficiency with which improving the efficiency with which scarce resources are allocated among scarce resources are allocated among their many competing uses, so as to their many competing uses, so as to best satisfy human wants.”best satisfy human wants.”

Three major Three major components of components of

EconomicsEconomicsThree key words or phrases can Three key words or phrases can be drawn from each of these be drawn from each of these definitions: scarcity, types of definitions: scarcity, types of resources, and wants and needs.resources, and wants and needs.

ScarcityScarcityScarcity is the economic term for a situation Scarcity is the economic term for a situation in which there are not enough resources in which there are not enough resources available to satisfy people’s needs or wants. available to satisfy people’s needs or wants. Economics is the study of society’s Economics is the study of society’s allocation of scarce resources. These allocation of scarce resources. These resources are considered scarce because of resources are considered scarce because of a society’s tendency to demand more a society’s tendency to demand more resources than are available. A resource resources than are available. A resource that is not scarce is called a free resource or that is not scarce is called a free resource or good. However, economics is mainly good. However, economics is mainly concerned with scarce resources and goods. concerned with scarce resources and goods. Scarcity is what motivates the study of how Scarcity is what motivates the study of how society allocates resources.society allocates resources.

Shortage versus Shortage versus ScarcityScarcity

Shortage and scarcity are not the same. Shortage and scarcity are not the same. Scarcity always exists because it relates Scarcity always exists because it relates to an unlimited or unsatisfied want, to an unlimited or unsatisfied want, whereas shortages are always whereas shortages are always temporary. Shortages often exist after temporary. Shortages often exist after natural disasters destroy goods and natural disasters destroy goods and property. Temporary shortages of property. Temporary shortages of products such as gasoline may be cause products such as gasoline may be cause when imports are dramatically when imports are dramatically decreased for any reason.decreased for any reason.

Types of ResourcesTypes of Resources

Resources are the inputs that society Resources are the inputs that society uses to produce outputs. Traditionally, uses to produce outputs. Traditionally, economists have classified resources economists have classified resources as natural resources (land), human as natural resources (land), human resources (labor), manufactured resources (labor), manufactured resources (capital), and resources (capital), and entrepreneurship (management).entrepreneurship (management).

Natural Resources Natural Resources (Land)(Land)

Land and the mineral deposits in Land and the mineral deposits in it constitute a huge natural it constitute a huge natural resource in the agricultural resource in the agricultural

industry.industry.

Human Resources Human Resources (Labor)(Labor)

The services provided by laborers The services provided by laborers and managers for the production and managers for the production of goods and services are human of goods and services are human resources and are also considered resources and are also considered

scarce.scarce.

Manufactured Manufactured Resources (Capital)Resources (Capital)

All the property people use to All the property people use to make other goods and services is make other goods and services is capital. These resources take the capital. These resources take the

form of machines, equipment, form of machines, equipment, and structures.and structures.

Entrepreneurship Entrepreneurship (Management)(Management)

Entrepreneurship refers to the ability of Entrepreneurship refers to the ability of individuals to start new businesses and to individuals to start new businesses and to introduce new products and techniques.introduce new products and techniques.

Today the four resources just discussed Today the four resources just discussed are called the are called the factors of productionfactors of production. They . They are used to produce goods and services. are used to produce goods and services. Goods are the items people buy. Services Goods are the items people buy. Services are the activities done for others for a fee.are the activities done for others for a fee.

Wants and NeedsWants and Needs Needs include things that are really Needs include things that are really

crucial to daily living. Basic needs crucial to daily living. Basic needs include enough food, clothing, and include enough food, clothing, and shelter to survive. Most of us would shelter to survive. Most of us would also consider a good education and also consider a good education and adequate health are to be needs. Of adequate health are to be needs. Of course, there are other needs course, there are other needs depending on your situation.depending on your situation.

Wants are things that are not Wants are things that are not crucial to daily living. A basic crucial to daily living. A basic tractor is a need to a farmer, but a tractor is a need to a farmer, but a tractor with a cab, air conditioner, tractor with a cab, air conditioner, and radio may be a want. The and radio may be a want. The difference between needs and difference between needs and wants is not always clear. The wants is not always clear. The tractor with an air conditioned may tractor with an air conditioned may be a need if the operator has be a need if the operator has severe allergies.severe allergies.

Economists use the term Economists use the term insatiableinsatiable (unlimited, unsatisfied) wants. This (unlimited, unsatisfied) wants. This means that human wants cannot means that human wants cannot be satisfied no matter how much be satisfied no matter how much or how many goods we have. This or how many goods we have. This human trait, in conjunction with human trait, in conjunction with scarcity of resources, creates scarcity of resources, creates economic problems. The efforts to economic problems. The efforts to solve these problems are the basis solve these problems are the basis of the discipline of economics.of the discipline of economics.

Three basic economic Three basic economic questionsquestions

Because of the relationship between Because of the relationship between scarce resources and scarce resources and unlimited/unsatisfied wants, all societies unlimited/unsatisfied wants, all societies have to answer some basic economic have to answer some basic economic questions. These questions entail trying questions. These questions entail trying to decide what to sell, how to sell it, and to decide what to sell, how to sell it, and who should receive the benefits. who should receive the benefits. Therefore, all economic systems must Therefore, all economic systems must solve the following three questions:solve the following three questions:– What goods should be produced, and how What goods should be produced, and how

much of each?much of each?– How should these goods be produced?How should these goods be produced?– Who should get what and how much?Who should get what and how much?

What goods, and how much to What goods, and how much to produce.produce.– This question is answered every time This question is answered every time

people buy goods.people buy goods. How to produce goods.How to produce goods.

– This question is answered by agribusiness This question is answered by agribusiness producers or manufacturers according to producers or manufacturers according to what will yield the greatest profits.what will yield the greatest profits.

Who should get what?Who should get what?– This question refers to who will receive the This question refers to who will receive the

benefits of the goods. The question is benefits of the goods. The question is answered by determining who has the answered by determining who has the greatest needs, wants, and ability to paygreatest needs, wants, and ability to pay

To simplify the economic questions, To simplify the economic questions, assume that all the goods and assume that all the goods and services in our society or represented services in our society or represented by a pie.by a pie.

1.1. What type of pie to produce?What type of pie to produce?

2.2. What combination of ingredients to What combination of ingredients to use?use?

3.3. How to divide the pie?How to divide the pie?

Each society answers the three Each society answers the three basic questions (what, how, and basic questions (what, how, and for whom) according to its view of for whom) according to its view of how best to satisfy the needs and how best to satisfy the needs and wants of its people. The values wants of its people. The values and goals that a society sets for and goals that a society sets for itself determine the kind of itself determine the kind of economic system it will have. economic system it will have.

Economists have identified six types Economists have identified six types of economic systems: traditional, of economic systems: traditional, capitalism, fascism, socialism, capitalism, fascism, socialism, command (communism), and command (communism), and mixed. These terms are often used mixed. These terms are often used to designate political systems as to designate political systems as well as economic systems. The well as economic systems. The major distinction between these major distinction between these classifications is the degree of classifications is the degree of control by private individuals versus control by private individuals versus the group represented by the group represented by government.government.

Traditional SystemTraditional System

A pure traditional economic system A pure traditional economic system answers the three basic questions answers the three basic questions according to tradition. In a traditional according to tradition. In a traditional system, things are done “the way they system, things are done “the way they have always been done.” Economic have always been done.” Economic decisions are based on customs, decisions are based on customs, religious beliefs, and ways of doing religious beliefs, and ways of doing things that have been passed from things that have been passed from generation to generation. Today, generation to generation. Today, traditional economic systems exist in traditional economic systems exist in very limited parts of Asia, Africa, the very limited parts of Asia, Africa, the Middle East, and Latin America.Middle East, and Latin America.

CapitalismCapitalism

In capitalism, individuals have free reign In capitalism, individuals have free reign over their time and resources, and can over their time and resources, and can determine exactly how to use those determine exactly how to use those assets, with few legal controls by the assets, with few legal controls by the government. It is a self-regulating government. It is a self-regulating system that excludes the government system that excludes the government from economic decisions. What from economic decisions. What capitalism depends on is the will and capitalism depends on is the will and desires of those involved in the system. desires of those involved in the system. Market forces determine prices, assign Market forces determine prices, assign resources, and distribute income. Market resources, and distribute income. Market prices indicate the value of resources prices indicate the value of resources and economic goods.and economic goods.

SocialismSocialism

In sharp contrast to capitalism, the In sharp contrast to capitalism, the basis of socialism as an economic basis of socialism as an economic system is public ownership of all system is public ownership of all productive resources. Instead of little to productive resources. Instead of little to no involvement in the system (as with no involvement in the system (as with capitalism), the government or “state” capitalism), the government or “state” directs all decisions regarding the directs all decisions regarding the utilization of resources (both human utilization of resources (both human and nonhuman) by the various sectors and nonhuman) by the various sectors of the community. Decisions are of the community. Decisions are therefore made on a centralized basis therefore made on a centralized basis by government planners.by government planners.

FascismFascism

Fascism is an economic system in Fascism is an economic system in which productive property, though which productive property, though owned by individuals, is used to owned by individuals, is used to produce goods that reflect government produce goods that reflect government or state preferences. Fascism or state preferences. Fascism suppresses opposition, censors suppresses opposition, censors criticism, and denies some freedoms to criticism, and denies some freedoms to individuals. Although property is individuals. Although property is privately owned and businesses control privately owned and businesses control production, the government controls production, the government controls labor, employers, and consumers.labor, employers, and consumers.

CommunismCommunism

Communism is a totalitarian system of Communism is a totalitarian system of government in which a single, government in which a single, authoritarian political party or body authoritarian political party or body controls government-owned means of controls government-owned means of production. In other words, the production. In other words, the government has total control of government has total control of economic matters and private economic matters and private individuals have none.individuals have none.

Economics – A Economics – A historical perspectivehistorical perspective The Father of EconomicsThe Father of Economics

– England was the major center of England was the major center of intellectual activity during the 18intellectual activity during the 18thth century century and much current economic policy based and much current economic policy based on economic ideas presented during that on economic ideas presented during that period. Economic historians contend that period. Economic historians contend that all the ideas presented by Adam Smith all the ideas presented by Adam Smith had been introduced by other economists.had been introduced by other economists.

Adam Smith, like most economists of Adam Smith, like most economists of that time, was looking for new directions that time, was looking for new directions in economic policy to deal with the in economic policy to deal with the severe economic conditions he saw severe economic conditions he saw around him. He proposed a system around him. He proposed a system completely opposite to the system completely opposite to the system operating in England and many other operating in England and many other countries at that time. Several names countries at that time. Several names have been coined for the system he have been coined for the system he proposed. The major ones include pure proposed. The major ones include pure capitalism, free enterprise, and laissez-capitalism, free enterprise, and laissez-faire. All of these terms are used faire. All of these terms are used interchangeably, and they mean interchangeably, and they mean basically the same thing. The basic basically the same thing. The basic meaning is that individuals can control meaning is that individuals can control the economy without any government the economy without any government interference.interference.

““What is the role of government versus What is the role of government versus the role of individuals?” Adam Smith the role of individuals?” Adam Smith said, “The government should provide a said, “The government should provide a police force for internal and external police force for internal and external protection and nothing else. Economic protection and nothing else. Economic matters should be the sole responsibility matters should be the sole responsibility of private individuals.” He said, “Let of private individuals.” He said, “Let each individual seek his or her own each individual seek his or her own personal gain,” and that society would personal gain,” and that society would be guided by an “invisible hand” in such be guided by an “invisible hand” in such a way that as a whole it would be better a way that as a whole it would be better off than it would with government off than it would with government intervention. In other words, let each intervention. In other words, let each individual operate independently rather individual operate independently rather than having some government agency than having some government agency decide what should and should not be decide what should and should not be done.done.

Characteristics of the Characteristics of the American EconomyAmerican Economy

A common term for the U.S. economic A common term for the U.S. economic system is the system is the free enterprise systemfree enterprise system. It . It is the freedom of private businesses to is the freedom of private businesses to organize and operate for profit in a organize and operate for profit in a competitive environment. Government competitive environment. Government interference is necessary only for interference is necessary only for regulation to protect the public regulation to protect the public interest and to keep the national interest and to keep the national economy in balance.economy in balance.

The American economy has The American economy has six major characteristics:six major characteristics:

Little or no government controlLittle or no government control Freedom of enterpriseFreedom of enterprise Freedom of choiceFreedom of choice The right to own private propertyThe right to own private property Profit incentiveProfit incentive CompetitionCompetition

The six characteristics could be The six characteristics could be referred to as referred to as free enterprise with free enterprise with some regulationssome regulations. Notice the . Notice the influence of Adam Smith in these influence of Adam Smith in these six characteristics, which are six characteristics, which are discussed in the following discussed in the following subsections.subsections.

Freedom of EnterpriseFreedom of Enterprise

Our economic system is also Our economic system is also called the free enterprise system. called the free enterprise system. This term emphasizes that This term emphasizes that individuals are free to own and individuals are free to own and make decisions about the factors make decisions about the factors of production.of production.

Freedom of ChoiceFreedom of Choice

Part of freedom of choice is the Part of freedom of choice is the freedom to fail. Freedom of choice freedom to fail. Freedom of choice means that buyers make the means that buyers make the decisions about what should be decisions about what should be produced. The success or failure of produced. The success or failure of a good or service in the a good or service in the marketplace depends on individuals marketplace depends on individuals freely choosing what they want.freely choosing what they want.

Private propertyPrivate property

Private property is simply what is Private property is simply what is owned by individuals or groups owned by individuals or groups rather than by the federal, state, rather than by the federal, state, or local government. You are free or local government. You are free to buy whatever you can afford, to buy whatever you can afford, whether it is land, an whether it is land, an agribusiness, a home, or a car.agribusiness, a home, or a car.

Profit IncentiveProfit Incentive

The desire to make a profit is The desire to make a profit is called the called the profit incentive.profit incentive.

Macroeconomics Macroeconomics versus Microeconomicsversus Microeconomics

The total body of economic The total body of economic knowledge today is too extensive knowledge today is too extensive for a person to be a general for a person to be a general economist. The most common economist. The most common division of economics is into division of economics is into macroeconomics and macroeconomics and microeconomics.microeconomics.

MacroeconomicsMacroeconomics

The prefix The prefix macromacro means “large,” means “large,” indicating that macroeconomics is the indicating that macroeconomics is the study of the economy on a large scale study of the economy on a large scale or nationally. Macroeconomics looks at or nationally. Macroeconomics looks at the aggregate (total) performances of the aggregate (total) performances of all the markets in the national all the markets in the national economy and is concerned with the economy and is concerned with the choices made by large subsectors of choices made by large subsectors of the economy.the economy.

Cont.’dCont.’d Gross domestic productGross domestic product – the GDP of a – the GDP of a

country is defined as the market value country is defined as the market value of all final goods and services produced of all final goods and services produced within that country in a given period of within that country in a given period of time.time.

Aggregate supplyAggregate supply – aggregate supply is – aggregate supply is the total supply of goods and services the total supply of goods and services produced by a national economy during produced by a national economy during a specific time period.a specific time period.

Aggregate demand Aggregate demand – aggregate demand – aggregate demand is the total demand for goods and is the total demand for goods and services in a national economy during a services in a national economy during a specific time period.specific time period.

Unemployment rate Unemployment rate – the unemployment – the unemployment rate is the number of unemployed rate is the number of unemployed workers divided by the total civilian labor workers divided by the total civilian labor force, which includes all those willing and force, which includes all those willing and able to work for pay – both unemployed able to work for pay – both unemployed and employed.and employed.

Inflation and deflationInflation and deflation – inflation is a rise – inflation is a rise in the general level of prices, as in the general level of prices, as measured against some baseline of measured against some baseline of purchasing power. Deflation is a decrease purchasing power. Deflation is a decrease in the general price level, over a period of in the general price level, over a period of time.time.

Monetary policy Monetary policy – monetary policy is the – monetary policy is the government process of managing the government process of managing the money supply to achieve specific goals, money supply to achieve specific goals, such as constraining inflation, such as constraining inflation, maintaining an exchange rate, and maintaining an exchange rate, and achieving full employment or economic achieving full employment or economic growth.growth.

Fiscal policyFiscal policy – fiscal policy determines – fiscal policy determines changes in taxes, government spending changes in taxes, government spending on goods and services, and transfer on goods and services, and transfer payments that are intended to affect payments that are intended to affect overall (aggregate) demand in the overall (aggregate) demand in the economy.economy.

MicroeconomicsMicroeconomics

The prefix The prefix micro micro means “small,” means “small,” indicating that microeconomics studies indicating that microeconomics studies the economy on a small scale. the economy on a small scale. Microeconomics considers the individual Microeconomics considers the individual markets that make up the economy and markets that make up the economy and is concerned with the decisions made by is concerned with the decisions made by small economic units such as individuals, small economic units such as individuals, single firms, and individual government single firms, and individual government agencies such as the USDA and state agencies such as the USDA and state governments.governments.

Cont.’dCont.’d Market and prices Market and prices – markets are institutions – markets are institutions

that enable buyers and sellers to exchange that enable buyers and sellers to exchange goods and services. The amount of money goods and services. The amount of money people pay in exchange for a good or service people pay in exchange for a good or service is the price of that good or service.is the price of that good or service.

Supply and demandSupply and demand – supply is the different – supply is the different quantities of a resource, good, or service that quantities of a resource, good, or service that will be offered to consumers at various prices will be offered to consumers at various prices during a certain amount of time. Demand is during a certain amount of time. Demand is economic want backed up by purchasing economic want backed up by purchasing power, expressing different amounts of power, expressing different amounts of product buyers are willing and able to buy at product buyers are willing and able to buy at possible prices.possible prices.

Competition and market structure Competition and market structure – – competition is determined by the number competition is determined by the number of buyers and sellers in a particular of buyers and sellers in a particular market.market.

Income distributionIncome distribution – there are two – there are two classifications of income distribution. The classifications of income distribution. The first is functional distribution, where the first is functional distribution, where the division of an economy’s total income division of an economy’s total income goes into wages and salaries, rent, goes into wages and salaries, rent, interest and profit. Income distribution interest and profit. Income distribution also can be classified by personal also can be classified by personal distribution of income, which groups distribution of income, which groups different populations by the number of different populations by the number of people receiving various amounts of people receiving various amounts of income.income.

Positive versus Positive versus Normative EconomicsNormative Economics

The media often contain The media often contain statements about economic statements about economic issues. These statements can be issues. These statements can be classified into “what is” and classified into “what is” and “what should be.” These two “what should be.” These two main categories are called main categories are called positive and normative positive and normative economics, respectively.economics, respectively.

Positive EconomicsPositive Economics

Positive economics consists of objective Positive economics consists of objective statements dealing with matters of fact and statements dealing with matters of fact and questions about how things actually are. questions about how things actually are. Positive statements do not contain obvious Positive statements do not contain obvious value judgments or emotional content.value judgments or emotional content.

Positive economics can be described as Positive economics can be described as “what is, what was, and what probably will “what is, what was, and what probably will be” economics: emotion or social philosophy. be” economics: emotion or social philosophy. Often these statements express a hypothesis Often these statements express a hypothesis that can be analyzed and evaluated. that can be analyzed and evaluated. (continue to next slide)(continue to next slide)

……such as the following such as the following examples:examples:

Higher interest rates will cause a rise Higher interest rates will cause a rise in the exchange rate and an increase in the exchange rate and an increase in the demand for imports.in the demand for imports.

Lower taxes may stimulate and Lower taxes may stimulate and increase in the active labor supply.increase in the active labor supply.

A nationwide minimum wage will A nationwide minimum wage will probably cause a contraction in the probably cause a contraction in the demand for low-skilled labor.demand for low-skilled labor.

Cost-benefit analysisCost-benefit analysis

““That person is hungry.” What is the That person is hungry.” What is the cost of feeding that person? What cost of feeding that person? What benefit accrues to you or society if that benefit accrues to you or society if that person is not fed? What is the cost of person is not fed? What is the cost of not feeding that person? What is the not feeding that person? What is the benefit of not feeding that person? benefit of not feeding that person? Positive economics tries to answer Positive economics tries to answer such questions objectively, by doing such questions objectively, by doing what is called cost-benefit analysis.what is called cost-benefit analysis.

Normative EconomicNormative EconomicNormative economics consists of subjective Normative economics consists of subjective statements based on opinion only, often statements based on opinion only, often without a basis in fact or theory. They are without a basis in fact or theory. They are value-based, emotional statements that value-based, emotional statements that focus on “what ought to be.” Consider the focus on “what ought to be.” Consider the following examples:following examples:– A national minimum wage is undesirable A national minimum wage is undesirable

because it does not help the poor and because it does not help the poor and causes higher unemployment and inflation.causes higher unemployment and inflation.

– The national minimum wage should be The national minimum wage should be increased as a method of reducing poverty.increased as a method of reducing poverty.

– Protectionism is the only good way to Protectionism is the only good way to improve the living standards of workers improve the living standards of workers whose jobs are threatened by outsourcing whose jobs are threatened by outsourcing and imports.and imports.

Agriculture EconomicsAgriculture Economics

Agriculture economics Agriculture economics may be defined in may be defined in several ways, but basically it refers to several ways, but basically it refers to the the application of economic concepts to application of economic concepts to agricultural problems. agricultural problems. Therefore, as stated Therefore, as stated earlier, to be a productive agricultural earlier, to be a productive agricultural economist, one must first understand basic economist, one must first understand basic economic principles. Economics is economic principles. Economics is sometimes called a basic science, whereas sometimes called a basic science, whereas agricultural economics is an applied agricultural economics is an applied science.science.

Cont.’dCont.’d

The following definition is a good The following definition is a good example of merging general economics example of merging general economics with agriculture. Agricultural with agriculture. Agricultural economics is “an applied social science economics is “an applied social science dealing with how humans choose to dealing with how humans choose to use technical knowledge and scarce use technical knowledge and scarce productive resources such as land, productive resources such as land, labor, capital, and management to labor, capital, and management to produce food and fiber and to produce food and fiber and to distribute if for consumption to various distribute if for consumption to various members of society over time.”members of society over time.”