question_answer 13)

Let us take 3 farmers. Each has grown wheat on his field though the production is different (see column 2). The consumption of wheat by each family is the same (column 3). The whole of surplus wheat this year is used as capital for next year’s production.Also suppose, production is twice the capital used in production. (i) Complete the tables.   Farmer 1

	Production	Consumption	Surplus=Production-Consumption	Capital for the next year
Year 1 Year 2 Year 3	100 120	40 40 40	60	60

Farmer 2

	Production	Consumption	Surplus	Capital for the next year
Year 1 Year 2 Year 3	80	40 40 40		60

Farmer 3

	Production	Consumption	Surplus	Capital for the next year
Year 1 Year 2 Year 3	60	40 40 40

  (ii) Compare the production of wheat by the three farmers over the years. (iii) What happens to farmer 3 in year 3? Can he continue production? What will he have to do to continue production?  

Answer:

(i) Farmer 1

	Production	Consumption	Surplus	Capital for the next year
Year 1 Year 2 Year 3	100 120 160	40 40 40	60 80 120	60 80 120

Farmer 2

	Production	Consumption	Surplus	Capital for the next year
Year 1 Year 2 Year 3	80 80 80	40 40 40	40 40 40	40 40 40

Farmer 3

	Production	Consumption	Surplus	Capital for the next year
Year 1 Year 2 Year 3	60 40 00	40 40 40	20 00 40	20 00 40

   (ii) Comparison of wheat production of the 3 farmers over the year was as follows—  

	Farmer 1	Farmer 2	Farmer 3
Year 1 Year 2 Year 3	100 120 160	80 80 80	60 40 00

  •The production of wheat of the first farmer increased from 100 to 160. •The production of wheat of the second farmer was constant at 80. •The production of wheat of the third farmer declined from 60 to 00. (iii) In the third year, the third farmer did not produce any wheat and had to buy it from the market. He cannot continue production any longer unless he arranges capital, as he has no surplus to invest as capital.