Risk analysis continues to emphasize price and yield variability as the principal components of the decisionmaker's risk environment. This research demonstrates the relative importance of financial risk for a representative cotton farm in Arizona. For highly leveraged operations, financial risk may account for 70 percent of the total risk faced by the producer. Implications for future risk analysis are discussed in light of these findings.

This note describes an approach for teaching undergraduate students basic properties of cost and production functions with the aid of computer-generated illustrations. Parameters of a third degree polynomial are derived by making use of both the theoretical restrictions and the specific agricultural production process. The function is then used as the basis for the development of a simple computer graphics program which generates illustrations of the corresponding MPP, AC, and MC functions. Such illustrations can be used to make technically accurate visual aids.

Recent egg price quotes are evaluated in a vector autoregression. The results indicate that empirical relationships observed over the period 1975-1976 differ from those observed over the period 1979-1982.

Accounting techniques of farm enterprise budgeting are rarely linked to the axioms of static production theory and to capital theory. This paper illustrates how certain linkages may be established. Particular attention is given to handling problems of scale economies, optimal output levels, replacement of durable inputs, inflation, and technological change. Estimates in an illustrative budget are linked to specific points on average cost curves. Budgeting for representative farm situations is compared to budgeting for specific situations.

Farm level risk analyses have used price and yield variability almost exclusively to represent risk. Results from a survey of 149 agricultural producers in 12 states indicate that producers consider a broader range of sources of variability in their operations. Significant differences exist among categories with respect to the importance of the sources of variability in crop and livestock production. Producers also used a variety of management responses to variability. There were significant difference among categories in the importance given to particular responses and their use of them. These results have implications for research, extension, and policy programs.