Supposed that there is widespread inefficiency in agricultural production in a region, due to low uptake of new information and new farming practices. Now suppose that agricultural extension services provided by the government lead to higher efficiency in production. a) Is this likely to improve overall wellbeing among farmers in the region? Does the answer to this question depend on whether the low efficiency prior to the government intervention is due to low allocative efficiency, low technical efficiency, or both? b) Does your answer to (a) depend on whether raising efficiency is costless for the farmers or not? Illustrate your answer graphically.
Supposed that there is widespread inefficiency in agricultural production in a region, due to low uptake of new information and new farming practices. Now suppose that agricultural extension services provided by the government lead to higher efficiency in production. a) Is this likely to improve overall wellbeing among farmers in the region? Does the answer to this question depend on whether the low efficiency prior to the government intervention is due to low allocative efficiency, low technical efficiency, or both? b) Does your answer to (a) depend on whether raising efficiency is costless for the farmers or not? Illustrate your answer graphically.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Supposed that there is widespread inefficiency in agricultural production in a region, due to low uptake of new information and new farming practices. Now suppose that agricultural extension services provided by the government lead to higher efficiency in production.
a) Is this likely to improve overall wellbeing among farmers in the region? Does the answer to this question depend on whether the low efficiency prior to the government intervention is due to low
b) Does your answer to (a) depend on whether raising efficiency is costless for the farmers or not? Illustrate your answer graphically.
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