General information on the Unit

ECTS: 5
Contact hours: 46 (34 lectures, 12 practicals)
Personal work hours: 79
Character: Compulsory
Venue: Mediterranean Agronomic Institute of Zaragoza
Scheduling:
- Developed during the first academic year of the Master, at the beginning of the first semester.
- The assessment of this Unit consists of a continuous evaluation of some of the practical exercises and a written exam during the first semester.
Requisites and permanence
There are no previous requisites. Previous knowledge of economics and quantitative analysis facilitates the achievement of learning outcomes – a refreshing course on microeconomics and econometrics is available for those requiring it.
Learning methods
Combination of theoretical and practical sessions consisting of lectures and solving of exercises and problems.
Language
Lecturers deliver the topics in Spanish or English. In the latter case, simultaneous interpretation into Spanish is provided. The documents supplied by the lecturers may also be written in Spanish or English.

Presentation of the Unit and context within the syllabus

This Unit analyses agricultural producer behaviour explained by the neoclassical economic theory. Production is studied, with special emphasis on short and long term costs. Special attention is given to profit maximization, competitive supply and competitive marketing equilibrium. Empirical estimation of elasticities and case studies are provided. The theory and methods required to specify and estimate consumer demand relationships are also presented. Important items are the foundations of the neoclassical theory and the properties of the demand functions. Empirical analysis of demand is presented based on time series demand analyses and household budget studies. Finally, the theoretical framework for price discovery and determination analyses in agricultural markets are studied. Spatial price variations are examined in detail, as well as agricultural prices over time and the theory of marketing margins. Empirical cost studies and marketing efficiency analyses provide applications to the theory.

Competences

Specific competences

• SC1 Understanding agricultural production in economic terms and mastering the concepts of supply, demand and price determination in agro-food markets.

General competences

• ­GC1 Integrating scientific and technical knowledge and applying them discerningly.
• ­GC3 Analyzing results or strategies and elaborating conclusions which contribute to clarify the problems and to find possible solutions.
• GC6 Team-working and promoting exchange and collaboration attitudes with other students, researchers and professionals.
• GC7 Communicating reasoning and conclusions both to a general audience and to a specialized public.
• GC8 Writing presentations and synthesis, preparing and presenting oral communications, and defending them in public.

Learning outcomes

The student, at the end of the learning of this Unit:

• Knows how to characterize the agricultural production in economic terms and how to achieve profit maximization under competitive supply, and is able to measure and estimate production costs and elasticity of supply.
• Understands the properties of demand functions, and is acquainted with the theory and methods enabling the estimation of agro-food demand.
• Knows the theory of price determination in agro-food markets, and has gained further insight into the analysis of spatial and temporal variations of prices as well as the theory of marketing margins, as a framework to establish marketing efficiency.

Contents

• Production functions and costs
• Medium and long-term supply
• Estimation of elasticities
• Theoretical background of demand
• Properties of demand functions and empirical analysis of demand
• Agricultural price discovery and determination
• Price differences in space and time
• Marketing margins

Learning activities

Learning activity 1: Lectures combined with illustrative examples
ECTS: 4.2
Hours: 105
Percentage of contact: 32%

Learning activity 2: Solving of exercises and problems
(A) Supply of agricultural products
Students work in groups of 4 persons with data contributed by the lecturer, solving the following exercises:
1 - Calculate and represent total, medium and marginal product values for a production process with a single variable input, as well as the isoquant curves for a production process with two variable inputs;
2 - Calculate and represent unitary costs, profits, and supply curve, of a particular producer;
3 - Compute industry equilibrium in the short and long runs;
4 - Simulate a supply curve and compute producer welfare variations raised from a change in trade policy.
Results for exercises 1, 2 and 4 are obtained using Excel. Each group has to interpret and comment the obtained results and answer a series of questions drawn from these results. Each group delivers a brief report with the results of the exercises and the answers to the questions. Afterwards, each group has to make a short presentation and answer questions from the lecturer and the rest of the students in a common session.
(B) Demand for agricultural products
Students work in groups of 4 persons solving a series of exercises on demand analysis. Students receive the support of the lecturer when solving the exercises and discuss the results in a joint session.
(C) Agricultural prices
Students work in pairs solving a series of problems on the application of agricultural prices. Some of these problems are designed as multiple-choice questions, so that students can practice to respond to similar questions in the written exam.
ECTS: 0.8
Hours: 20 (A: 14, B: 3, C: 3)
Percentage of contact: 60% (A: 43%, B: 100%, C: 100%)

Assessment methods

Assessment system 1: Written exam, composed of questions provided by the different lecturers of the Unit covering the lectures and exercises similar to those carried out during the practicals. The exam is made up of concrete questions requiring a short answer, being possible also multiple-choice tests. Short-answer questions are marked according to the technical and conceptual precision of the answer, and to the reasoning approach.
Weighting: 80% of the final score of the Unit (Supply: 20%, Demand: 30%, Prices: 30%)

Assessment system 2: Global assessment of the practical work A by the lecturer.
Understanding of the methodology, the validity of the results and the accuracy of the answers will be assessed, considering both the reports and the presentation (80% reports, 20% presentation and discussion).
The score is the same for all group members.
Weighting: 20% of the final score of the Unit

Lecturers

Rachael E. GOODHUE, Univ. California, Davis (United States)
Ariane KEHLBACHER, Univ. Reading (United Kingdom)
Rigoberto LOPEZ, Univ. Connecticut (United States)

Introductory courses on microeconomics and statistics
George PHILIPPIDIS, EC Joint Research Centre, Sevilla  (Spain)
Helena RESANO, Univ. Zaragoza  (Spain)