This study attempts to explain the coexistence of different farm lease arrangements in terms of the varying significance of entrepreneurial functions. In India, crop-sharing arrangements are common in areas of relative economic certainty with very little scope for decision making, for example, for product and factor substitution, and where the entrepreneurial profit is low. Fixed-cash rents are common in situations of high uncertainty where the scope for decision making is significant or where the crops are highly profitable. Efficiency considerations predominate in areas of sharecropping, favoring a smaller farm size, whereas, under high uncertainty, large size is favored for reducing risk.

This article presents a generalization of the square-root theorems formulated by various authors with regard to special kinds of safety reserves. Some of the results established in the paper are the following: (1) the validity of the square-root law does not require that the actual components of net demand be stochastically independent and identically distributed; (2) in particular, such a law is compatible with the existence of serial correlation among reserve changes; and (3) if expected net demand differs from zero, the elasticity of the total reserve with respect to expected demand is between 0.5 and 1.

This essay discusses and measures the efficiency of resource allocation by peasants in three villages located in the grain-producing area of north China between 1937 and 1940. Family farm budget data collected by Japanese researchers were used to determine how well peasants allocated their land and labor between four major grain crops. Marginal value products for land and labor were obtained from fitting data to a Cobb-Douglas production function for each grain crop. These values were then equalized by the method of iteration and substituted in the original production function to obtain the maximum income obtainable had peasants allocated their resources with maximum efficiency. When peasant farm income was compared with the maximum income obtainable, the results showed that in spite of increasing market uncertainty, peasants were allocating their land and labor very efficiently.

In this paper we explore various criteria for risky decision making and examine the relationship among these rules, full cost pricing, and safety margin maximization. The three rules are alternative versions of the "safety-first" principle; each is concerned with expected profits and with the probability of loss. Since the probability of loss can be identified with the firm's margin of safety, these rules can be viewed as alternative ways of making a compromise between expected profit maximization and high safety margins. They result in various output policies which can be most simply characterized as "full cost" or"safety margin" pricing. Rules of thumb related to recovering full cost are therefore explained by the marginal analysis that was supposed by some to refute them.