Law Of Diminishing Returns

brThe rectitude of Diminishing Returns deals with the relationship between different gossips and railroad sidings in the return process br Saba Khalid Normal Saba Khalid 2 2 2007-10-08T12 :28 :00Z 2007-10-08T12 :28 :00Z 1 399 2279 Khalid 18 5 2673 10 .2625 brbr Clean Clean br br br MicrosoftInternetExplorer4 brThe Law of Diminishing Returns deals with the relationship between different inputs and outputs in the exertion process . According to Samuelson the righteousness of diminishing returns holds that we impart enamour less and less excess output when we add attendant doses of an input while holding other inputs unflinching . This law was conceptualized by early economists such as David Ricardo Thomas Malthus Johann Heinrich von Th nen and Turgot This commode be better explained with an example . With a fixed amount of land i .e . 100 acres if we mint that no labor inputs ar used . This provide stretch to zero corn production or output . On the same 100 acre land if we employ 1 building block of labor it get out lead to the production or output of 2000 bushels of corn . If we increase the labor input to 2 units on the same fixed 100 acres of land it will result in 3000 bushels of corn . As we continue adding to a greater extent labor units to the fixed land a point will arise when the added labor will lead to diminishing returns or decreased production of corn . The law of diminishing returns can be seen below in the tablebr UNITS OF LABOR br br EXTRA OUPUT FROM EXTRA LABOR br br 0 br 0 br br 1 br 2000 br 2000 br br 2 br 3000 br 1000 br br 3 br 3500 br 500 br br 4 br 3800 br 300 br br 5 br 3900 br 100 It is clear that the low input addition lead to 2000 bushels output while the second extra labor input only when resulted in 1000 bushels extra output .

The switch off goes on as the third labor unit only increases corn output by 500 bushels extra and the after part labor input gives a 300 bushels increase extra . With the 5th labor input only 100 bushels output is generated A nonher example of the same phenomena is of studying economics . The first minute of arc of studying will lead a individual to understand many new concepts , facts , history and insights . The second hour will increase the person s economic friendship but his or her mind will start to roll out off a little . The third hour will most likely set the diminishing returns in near vengeance The law of diminishing returns is a broadly observe and greatly important economic relationship . This law is not valid for all technologies . Also , it is seen that the very first hardly a(prenominal) inputs might even result in increasing production or output . However , ultimately returns will be diminishing for most technologies This law is a key component why many Asian countries are poor . Lands are crammed with too many farmers . The result is lower productivity and output...If you motivation to get a full essay, order it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper