312

APPENDIX

In Fig. (xi), let the curve be drawn so that, taking any
point on it, P, and drawing the ordinate PN, ON may
represent the expenditure of labour and capital which, on a
given area of land, returns an amount of produce represented
by PN in a normal year. The expenditure may, if desired,
be measured by the money price required to secure the
services of labour and capital to the extent needed. For
some purposes, too, the produce may be measured by its
money value, but for some applications of the diagram we
need to conceive of it as measured in terms of quantity.
On NP take a point C such that NC represents the
amount of produce
whose market
value is sufficient
to recompense the
expenditure ON.
Draw the straight
line OCE. If Q
be another point
on the curve, and
the ordinate QM
intersect OC in E,
ME will represent
the amount of
produce needed to
recompense the
expenditure OM.
The cultivator has
a surplus CP when
his outlay is ON,
a surplus EQ
when his outlay is OM. In order that the surplus may be
the greatest possible, we must find the point on the curve at
which the tangent is parallel to OCE. If that point be P,
then CP is greater than EQ whatever position Q may have.
The expenditure ON will be that giving the greatest excess
of return over outlay. If the expenditure ON include an
adequate remuneration to the cultivator, the amount CP will
be the most that can profitably be given for the hire of the
land, and a keen competition for tenancies will assign no less
than this to the owner (cf, Pp. 100-102).
If the curve be drawn so that PN represents the value
of the produce secured by an expenditure ON, CN will be
equal to ON in length, and CON will be half a right angle.

Fig. (: