The roles of nitrogen absorption and nitrogen utilization efficiency under different fertilizer rates were studied in a field experiment involving Taihu Lake region Fe-leaching-Stagnic Anthrosols. The 15N tracer technique was also employed to reliably calculate the amount of nitrogen loss. We measured rice yields, nitrogen utilization efficiencies, and the amounts of nitrogen loss under different levels of application of nitrogen fertilizer in the paddy field. The economic benefit and environmental benefit were evaluated with the data obtained from the experiment. In accordance with the calculus theory of mathematics and the Coase Theorem of Environmental Economics, the results showed that the ecologically and economically appropriate amount of nitrogen fertilizer for producing rice in this area was in the range: 219-255 kg hm^-2, and the corresponding economic and ecological yield was in the range: 8600-8661 kg hm^-2 using current agricultural production technology.