Skip to main content

Land utilisation

  LAND UTILIZATION  Land is a scarce resource, whose supply is fixed for all practical purposes. At the same time, the demand for land for various competing purposes is continuously increasing with the increase in human population and economic growth.Land use pattern at any given time is determined by several factors including size of human and livestock population, the demand pattern, the technology in use, the cultural traditions, the location and capability of land, institutional factors like ownership pattern and rights scale regulation. Major Types of Land Utilization in India : As in all other countries, land in India is put to various uses. The utilization of land depends upon physical factors like topography, soil and climate as well as upon human factors such as the density of population, duration of occupation of the area,land tenure and technical levels of the people.There are spatial and temporal difference in land utilization due to the continued interplay of phys...
Post a Comment

CONCEPT OF COSTS

Concept of cost
Meaning : Cost refers to the expenditure incurred by a producer on the factor (land, Labour, capital) as well as non factor (raw material) inputs for a given amount of output of a commodity.

Types of costs 
a) Money costs -Money costs refers to the sum of all payments to the factors of production engaged in the production of that commodity . It is the cost which enters the records of accountants of a company.
b) Opportunity cost  - Opportunity cost is the forgone value of inputs measured in terms of currently available next best alternative that is sacrificed.
c) Explicit costs - Expenditure incurred by the producer on the purchase of input from the market is called explicit costs.
d) Implicit costs - Estimated expenditure on the use of self owned inputs is called implicit cost.
e)Selling costs - Selling costs refer to the expenditure incurred by the producer in order to promote sale of the commodity.
Expenditure on advertisement is selling cost
f) Short -run cost - Short run is a period of time during which some factors are fixed and some are variable. In short run , only the proportion of the input can be changed not the scale.
The short run costs are divided into two types in order to help production and cost analysis :
1) Fixed cost : The fixed costs of a firm are those costs that do not vary with the size of its output. These are the costs of fixed plant and equipment of the firm.
2) Variable cost : Variable costs are those cost which change with the changes in the volume of output. These costs are also called as prime costs . Wages, payments for raw material , for fuel , for taxes are variable cost.
3) Average costs - Average cost i, the cost per unit of output produced. It is also called unit cost of production.It consists of two factors ime average fixed cost and average variable cost.
                      AC=AFC+ AVC
AFC is computed by dividing the total fixed cost by total output .
AVC is computed by dividing the total variable cost by total output.
4)Total cost - The overall cost that is incurred in the process of production in the short run period is called total cost.It also consists of two factors i.e Total fixed cost and total variable cost.
TFC are costs incurred on factor inputs which cannot be changed during short period.
TVC are the costs incurred on the purchase of variable factors.These can change when the output changed .
4)Marginal cost - Marginal cost is the addition to total cost due to the addition of one unit of output. It is the change in total cost when an additional unit of output is produced.

Relation between marginal cost and average cost
a) Both MC and AC are calculated from total cost.
b) When AC is falling, the MC is lower than AC.
c) When AC is rising, MC lies above AC and rises faster than AC.
d) MC curve must cut AC at its maximum point.

Comments

Post a Comment

Popular posts from this blog

Factors of production

Factors of production  The factors of production viz. land, labour, capital and management when combined in proper proportion and then used wisely can help to achieve higher level of efficiency in farming business. Use of any resource beyond its capacity can result in its rapid depletion and deterioration which may cause severe damage to sustainability of farming. Similarly, under utilization of resources or misutilization of resources may result in high cost of production and thus lower the efficiency of agriculture.  Contribution of Land in agricultural development Land in agriculture may  be used in a restricted sense though is complex and affects agriculture in several ways. It is essential for the habilitation of human beings and other living creatures. It is required for agricultural operation ,development of industries, growth of forest, building, road and rail transportation system on its surface. The contribution of land in agricultural development can be judged ...
Post a Comment
Read more

FUNCTIONS OF MONEY

FUNCTIONS OF MONEY Various functions of Money can be classified into three broad groups: a) Primary functions b) Secondary functions c) Contingent functions d) other functions Primary functions   a) Medium of exchange : Money must be commonly accepted by the people in exchange of goods and services to be successful medium of exchange.Money benefits the society in number of ways as a medium of exchange. -It offers sales and purchases through money. -It promotes transactional efficiency. -It allows freedom of choice . b) Measure of value : Money serves as common measure of value in terms of which value of all goods and services is measured and expressed. It has made transactions easy and simplifies the problem of measuring and comparing prices of goods and services. c) Unit of account : As a unit of account, it helps in developing an efficient accounting system . It provides basis for keeping account ,estimating national income,cost of a project etc. Secondary functions a) Standar...
Post a Comment
Read more

Role of capitalism

ROLE OF CAPITALISM IN DEVELOPING ECONOMY Capitalism is that part of the economics where there is no role of government agencies. The sole supe power of capitalism is in the hands of private owners. This means that if private is working on the behalf of government, instead of social welfare, their main objective is to have profits. Features Lack of intervention of government. Role of private firms. Role of price mechanisms. Advantages Encourages innovation Efficient firm incentives Consumers can choose services of their choice. Prevents government from interrupting. Creates climate of innovation and economic expansion. Helps in increasing GDP. Disadvantages Firms can gain monopoly power. Externalities damages the environment. Prone to boom and bust in the economic cycles. Inequality creates social division. Capitalist market crashes causes economic downturn , uneven business cycles. There is difficulty in mobilising unprofitable sector into profitable sectors. By taking advantage of poo...
Post a Comment
Read more