Access the answers to hundreds of Diminishing returns questions that are explained in a way that's easy for you to understand. Here, we have increase in the number of pizzas, but (40<50) we have diminish in return because the increase is not as much as the first machine. Favorite Answer. labour), there comes a point where it will become less productive and therefore there will eventually be a decreasing marginal and then average product. There are some assumptions for the law of diminishing returns to a factor to be valid. To illustrate its application to capital, a fixed quantity of capital invested in a manufacturing plant may be considered. Diminishing return does not talk about good getting old. Productivity will definitely fall. c.old ideas are not as useful as new ones. In agriculture, the law of diminishing returns sets in at an early stage because one very important factor, i.e., land is a constant factor there and it cannot be increased in right proportion with other variable factors, i.e., labor and capital. For example, if the production function is Q=3K+2L (where K represents units of capital and L represents units of labor), then the marginal product of capital is simply three; every additional unit of capital will produce an additional three units of output. Then what do you think will happen. Answer. The monetary difference between giving nothing and giving $500,000 is obviously the same as the monetary difference between giving $4.5m and giving $5m. Is being a cashier a mindless and boring job? Having 1 machine, we can produce 50 pizzas. Neoclassical economists assume that each "unit" of labor is identical. Describe the two major affective disorders, the heritability of these diseases, and their… Suppose your dorm is 3.66m wide by 3.66m long by 2.71m high and has an air conditioner that… Place your order. b. old ideas are not as useful as new ones. Continue to order Get a quote. regarding GDP, inflation, and unemployment, what business cycle does this most closely fit? It's just like the Gov they cut every body's food stamps to make up the differences in the deffes..They kept takeing away from the poor there will be nothing left to take . by ever smaller amounts. All else equal, if there are diminishing returns and constant returns to scale, then what happens to productivity if capital and labor both increase but capital increases by more? d.increases in the capital stock eventually decrease output. If there are diminishing returns to labour when capital is fixed,then? For instance, lets say we have a pizza store. This note articulates the opposite view: most evidence suggests diminishing returns powerful enough that further capital accumulation will cause a decline in net capital in-come, rather than an expansion. ? a.increases in the capital stock increase output by ever smaller amounts. human capital has been shown to be relatively unimportant, relative to investment in physical capital, for a country’s long‐run economic success. In other words, adding extra amounts of capital gives progressively smaller and smaller Productivity will definitely be unchanged.c. Only authorized users can leave an answer! Diminishing Returns. In particular the decreasing marginal returns is caused by the law of diminishing marginal returns. then what's in the stores will go to waste. What’s the difference between money and wealth ? 1 Answer. a)the marginal product of labour is increasing. Diminishing Returns And Capital And Labor The law of diminishing returns applies to capital and labor as well as to land. Get help with your Diminishing returns homework. Answer and Explanation: The right answer choice is c. If both capital and labor increase, productivity will definitely rise. Indeed, for , the general CES function given by Equation 1 simplifies to and the Answer Save. 1. In industries, the various factors of production can be co-operated, up to a certain point. a)the marginal product of labour is increasing. Still have questions? c. increases in the capital stock eventually decrease output. If, following Piketty (2014)’s model of savings, a de-cline in g causes an expansion in the long-term capital stock, both the net capital share diminishing returns, and then to use technology as an explanatory variable when the other concepts are seen to not have sufficient explanatory power. These are: The technique of production does not change – If a producer is using the capital intensive technique, then it will remain the same, and it will not change to labor-intensive technique during the production process. The law of diminishing returns remains an important consideration in farming. This law is also called the principle of diminishing marginal productivity. Get help with your Diminishing returns homework. b. old ideas are not as useful as new ones. Still have questions? If prices don't come down people can not afford it. There are a great deal of studies on the four Asian NIEs (hereafter NIEs) - South Korea, Taiwan, Hong Kong, and Singapore in recent years. The law of diminishing returns operates in both cases lf more and more labour and capital are applied to the same piece of land, the return per dose diminishes after some time. b.capital produces fewer goods as it ages. d) all of the above. b)the average product of labour always exceeds the marginal product of labour. human capital has been shown to be relatively unimportant, relative to investment in physical capital, for a country’s long‐run economic success. capital) If the variable factor of production is increased (e.g. Access the answers to hundreds of Diminishing returns questions that are explained in a way that's easy for you to understand. The monetary difference between giving nothing and giving $500,000 is obviously the same as the monetary difference between giving $4.5m and giving $5m. There is conjecture that political instability (5), poor government decisions (4, 5 ), and epidemics such as AIDS (6, 7) may be responsible for some of the exceptional failures to bring down high rates of infant mortality. Should we put an end to people who can't find a partner. 10) All else equal, if there are diminishing returns to labor and diminishing returns to capital, then what If an area exhibits diminishing returns, then the social return on each additional dollar will decline as they give more to the charity. Schumpeterian theories of endogenous growth have, to some extent, also been motivated by diminishing returns to R&D by assuming that innovations are spread over a larger variety of products and, therefore, that there is a tendency for decreasing returns to … Red Fluffy Panda . If there are diminishing returns to capital, then? This law is also called the principle of diminishing marginal productivity. In Economics, the law of diminishing returns holds that if one input is held constant (capital) while other inputs ( e.g. Join Yahoo Answers and get 100 points today. Thus, the law applies to intensive cultivation. Post navigation. Answer and Explanation: The right answer choice is c. If both capital and labor increase, productivity will definitely rise. By adding the 2nd machine, pizza numbers increase to, lets say, 90. 8 years ago. Only authorized users can leave an answer! 10) All else equal, if there are diminishing returns to labor and diminishing returns to capital, then what To capture this possibility, growth is often modeled as a quadratic function of aid relative to GDP. Answer Save. d. increases in the capital stock increase output by ever smaller amounts. QUESTION 1 1 points Save Answer If there are diminishing returns to capital, then o a capital produces fewer goods as it ages. 20. Answers. then we lack a theoretical account of why the law of diminishing returns has been suspended for health. O b. old ideas are not as useful as new ones O c. decreases in the capital stock decreases output by ever larger amounts. d.increases in the capital stock eventually decrease output. If when the plant is undermanned the amount of labor is gradually increased, for a time the product will be increased per unit of labor applied to the capital. All else equal, if there are diminishing returns and constant returns to scale, then what happens to productivity if capital and labor both increase but capital increases by more? Relevance. 2 Answers. labor) are being increased, a point is reached when the additional inputs yield smaller output or diminishing returns relative to the increasing inputs. Indeed, for , the general CES function given by Equation 1 simplifies to and the Diminishing returns occur in the short run when one factor is fixed (e.g. Less number of labor lead to unutilized capital, because capital is indivisible. Can you physically look at a female and tell if she is on her period? Similarly, if the third kilogram produces only ¼ ton, then the MC equals $1 per quarter ton, or $4 per ton. If there are diminishing returns to capital, then a. capital produces fewer goods as it ages. Productivity will definitely rise.d. Favourite answer. True… Schumpeterian theories of endogenous growth have, to some extent, also been motivated by diminishing returns to R&D by assuming that innovations are spread over a larger variety of products and, therefore, that there is a tendency for decreasing returns to … The Law of Diminishing Marginal Product (more often called, The Law of Diminishing Marginal Returns) states that with a fixed factor, more and more variable inputs applied to production will eventually result in less and less additional output. b)the average product of labour always exceeds the marginal product of labour. In Economics, the law of diminishing returns holds that if one input is held constant (capital) while other inputs ( e.g. Why is S a straight line? This means the second derivative of output with respect to capital is negative. True… All else equal, if there are diminishing returns and constant returns to scale, then what happens to productivity if capital and labor both increase but capital increases by more? 4. increases in the capital stock eventually decrease output. Note: the textbook definition: If a firm increases output by adding variable labour to fixed capital then eventually diminishing marginal returns (physical product of labour) will set in. Favorite Answer. I feel that it won't be good. Favourite answer. You can't squezz blood out of a turnip. If an organization falls in stage I of production, it implies that … Similarly, if the third kilogram produces only ¼ ton, then the MC equals $1 per quarter ton, or $4 per ton. There is a great deal at stake here, which makes some of the current treatments of heterogeneity look disconcertingly simplistic. If there are no other changes, then if the second kilogram of seeds applied to land produces only half the output of the first, the MC equals $1 per half ton of output, or $2 per ton. Answer Save. Diminishing returns is a short-run phenomena, where at least one factor of production is fixed in supply. One is law of increasing returns in stage I and law of diminishing returns in stage II. ? "all else equal, if there are diminishing returns and constant returns to scale, then what happens to productivity if capital and labor both increase but capital increases by more?" The law of diminishing returns operates in both cases lf more and more labour and capital are applied to the same piece of land, the return per dose diminishes after some time. c. Productivity will definitely rise. a. This note articulates the opposite view: most evidence suggests diminishing returns powerful enough that further capital accumulation will cause a decline in net capital in-come, rather than an expansion. These are: The technique of production does not change – If a producer is using the capital intensive technique, then it will remain the same, and it will not change to labor-intensive technique during the production process. Academic level. In other words, adding extra amounts of capital gives progressively smaller and smaller increases in output. 1. b.capital produces fewer goods as it ages. a. diminishing returns, and then to use technology as an explanatory variable when the other concepts are seen to not have sufficient explanatory power. QUESTION 1 1 points Save Answer If there are diminishing returns to capital, then o a capital produces fewer goods as it ages. Is it possible to maintain a sustained long-run growth despite diminishing returns to capital? c. increases in the capital stock eventually d. increases in the capital stock increase output decrease output. labour), there comes a point where it will become less productive and therefore there will eventually be a decreasing marginal and then average product. Thus, the law applies to intensive cultivation. . Can't find the answer? c. 0 0. Get answers by asking now. O b. old ideas are not as useful as new ones O c. decreases in the capital stock decreases output by ever larger amounts. One idea is that aid involves diminishing returns: as aid to a given country increases, it may become harder to use it effectively. But if, on the other hand, the farmer brings more and more land under cultivation, even then the returns will decrease. Productivity will definitely be unchanged.c. Decreasing then increasing marginal cost, reflected by a U-shaped marginal cost curve, is the result of increasing then decreasing marginal returns. labor) are being increased, a point is reached when the additional inputs yield smaller output or diminishing returns relative to the increasing inputs. However, the model also assumes there are diminishing marginal returns to capital accumula-tion. Join Yahoo Answers and get 100 points today. In Economics, the law of diminishing returns holds that if one input is held constant (capital) while other inputs ( e.g. There are several factors that are responsible for the application of these laws. Why is everyone but us so underdeveloped? If there are diminishing returns to capital, then a. capital produces fewer goods as it ages. but the thing is that sooner or later its all got to come to a head. Productivity will definitely fall.b. If there are diminishing returns to labour when capital is fixed,then? Among these factors, one of the most important factors for the law of increasing returns is fixed capital. Thus, diminishing marginal returns imply increasing marginal costs. Diminishing returns occur in the short run when one factor is fixed (e.g. In agriculture, the law of diminishing returns sets in at an early stage because one very important factor, i.e., land is a constant factor there and it cannot be increased in right proportion with other variable factors, i.e., labor and capital. This principle teaches managers to be aware that if they want to achieve total … Diminishing Returns. Lv 6. a. c)the marginal product of labour can be positive or negative. labor) are being increased, a point is reached when the additional inputs yield smaller output or diminishing returns relative to the increasing inputs. 8 years ago. The law of diminishing returns applies to capital and labor as well as to land. Diminishing returns is a short-run phenomena, where at least one factor of production is fixed in supply. To illustrate its application to capital, a fixed quantity of capital invested in a manufacturing plant may be considered. 1 Answer. If an area exhibits diminishing returns, then the social return on each additional dollar will decline as they give more to the charity. B It's the same old thing the rich get richer and the poor get poorer. Law of Diminishing Marginal Returns: The law of diminishing marginal returns is a law of economics that states an increasing number of new employees causes the marginal product of … Explain why you believe this.? Conditional Cash Transfers? Favorite Answer. What's something that makes you look smart in front of your pets? Two methods for increasing the production of a commodity boring job old ideas are not as useful new. 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