then we lack a theoretical account of why the law of diminishing returns has been suspended for health. 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? Productivity will definitely be unchanged.c. Favorite Answer. Can't find the answer? Access the answers to hundreds of Diminishing returns questions that are explained in a way that's easy for you to understand. What’s the difference between money and wealth ? a. Answers. Favourite answer. Diminishing Returns And Capital And Labor The law of diminishing returns applies to capital and labor as well as to land. Productivity will definitely rise.d. Can you explain why exports>imports is net capital outflow? Productivity will definitely fall.b. Solution for If there are diminishing returns to labor, then as more workers are hired the total amount produced by all of the workers will decrease. In Economics, the law of diminishing returns holds that if one input is held constant (capital) while other inputs ( e.g. 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 … If an organization falls in stage I of production, it implies that … Solution for If there are diminishing returns to labor, then as more workers are hired the total amount produced by all of the workers will decrease. One idea is that aid involves diminishing returns: as aid to a given country increases, it may become harder to use it effectively. capital) If the variable factor of production is increased (e.g. c.old ideas are not as useful as new ones. by ever smaller amounts. Get help with your Diminishing returns homework. Thus, diminishing marginal returns imply increasing marginal costs. Explain why you believe this.? regarding GDP, inflation, and unemployment, what business cycle does this most closely fit? b.capital produces fewer goods as it ages. d) all of the above. 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. Is it necessary to be rich to help people? 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 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. QUESTION 1 1 points Save Answer If there are diminishing returns to capital, then o a capital produces fewer goods as it ages. 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 … Is being a cashier a mindless and boring job? Red Fluffy Panda . diminishing returns, and then to use technology as an explanatory variable when the other concepts are seen to not have sufficient explanatory power. human capital has been shown to be relatively unimportant, relative to investment in physical capital, for a country’s long‐run economic success. c. 0 0. Favorite Answer. If an area exhibits diminishing returns, then the social return on each additional dollar will decline as they give more to the charity. Diminishing marginal returns are an effect of increasing input in the short-run, while at least one production variable is kept constant, such as labor or capital. 1 Answer. In other words, at some point an extra worker will add less output to the grand total than the previous worker. Similarly, if the third kilogram produces only ¼ ton, then the MC equals $1 per quarter ton, or $4 per ton. This principle teaches managers to be aware that if they want to achieve total … Indeed, for , the general CES function given by Equation 1 simplifies to and the This law is also called the principle of diminishing marginal productivity. O b. old ideas are not as useful as new ones O c. decreases in the capital stock decreases output by ever larger amounts. If prices don't come down people can not afford it. Lv 6. ? The law of diminishing returns remains an important consideration in farming. In Economics, the law of diminishing returns holds that if one input is held constant (capital) while other inputs ( e.g. 4. increases in the capital stock eventually decrease output. But if, on the other hand, the farmer brings more and more land under cultivation, even then the returns will decrease. Diminishing Returns. labor) are being increased, a point is reached when the additional inputs yield smaller output or diminishing returns relative to the increasing inputs. Should we put an end to people who can't find a partner. Red Fluffy Panda . Diminishing returns occur in the short run when one factor is fixed (e.g. a)the marginal product of labour is increasing. In particular the decreasing marginal returns is caused by the law of diminishing marginal returns. 2. old ideas are not as useful as new ones. If there are diminishing returns to capital, then 1. capital produces fewer goods as it ages. 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? Productivity will definitely be unchanged.c. human capital has been shown to be relatively unimportant, relative to investment in physical capital, for a country’s long‐run economic success. Does deficit finance always lead to inflation? In addition, with the help of graph of law of diminishing returns, it becomes easy to analyze capital-labor ratio. "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 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. Get answers by asking now. Productivity will definitely rise.d. Answer Save. d. increases in the capital stock increase output by ever smaller amounts. Don’t savings increase when interest rate is higher? c)the marginal product of labour can be positive or negative. labour), there comes a point where it will become less productive and therefore there will eventually be a decreasing marginal and then average product. Answer Save. Diminishing returns is a short-run phenomena, where at least one factor of production is fixed in supply. labor) are being increased, a point is reached when the additional inputs yield smaller output or diminishing returns relative to the increasing inputs. Only authorized users can leave an answer! They are 1 ) increasing the production by keeping some factors constant while changing the other factors 2) Increasing the production by increasing all the factors. c. Productivity will definitely rise. 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. But after the point is reached where the plant is fully manned, a … Thus, the law applies to intensive cultivation. There are some assumptions for the law of diminishing returns to a factor to be valid. then what's in the stores will go to waste. 9 years ago. Why is S a straight line? 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 … d.increases in the capital stock eventually decrease output. None of the above are necessarily correct. Productivity will definitely be unchanged. Less number of labor lead to unutilized capital, because capital is indivisible. b)the average product of labour always exceeds the marginal product of labour. Still have questions? True… d.increases in the capital stock eventually decrease output. a)the marginal product of labour is increasing, b)the average product of labour always exceeds the marginal product of labour, c)the marginal product of labour can be positive or negative. Continue to order Get a quote. c)the marginal product of labour can be positive or negative. For instance, lets say we have a pizza store. Decreasing then increasing marginal cost, reflected by a U-shaped marginal cost curve, is the result of increasing then decreasing marginal returns. Are There Diminishing Returns to Transfer Size in . Similarly, if the third kilogram produces only ¼ ton, then the MC equals $1 per quarter ton, or $4 per ton. b. 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? Anonymous. a.increases in the capital stock increase output by ever smaller amounts. This means the second derivative of output with respect to capital is negative. c. 0 0. Join Yahoo Answers and get 100 points today. If there are no other changes, then if the second kilogram of seeds applied to land produces only half the output of the first (showing diminishing returns), the marginal cost would equal $1 per half ton of output, or $2 per ton, and the average cost is $2 per 3/2 tons of output, or $4/3 per ton of output. ? diminishing returns, and then to use technology as an explanatory variable when the other concepts are seen to not have sufficient explanatory power. Access the answers to hundreds of Diminishing returns questions that are explained in a way that's easy for you to understand. a)the marginal product of labour is increasing. 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. Then what do you think will happen. Having 1 machine, we can produce 50 pizzas. Indeed, for , the general CES function given by Equation 1 simplifies to and the The law of diminishing returns applies to capital and labor as well as to land. Still have questions? Then poor will get it any way . 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. In Economics, the law of diminishing returns holds that if one input is held constant (capital) while other inputs ( e.g. There are a great deal of studies on the four Asian NIEs (hereafter NIEs) - South Korea, Taiwan, Hong Kong, and Singapore in recent years. 10) All else equal, if there are diminishing returns to labor and diminishing returns to capital, then what One is law of increasing returns in stage I and law of diminishing returns in stage II. c. increases in the capital stock eventually d. increases in the capital stock increase output decrease output. Relevance. QUESTION 1 1 points Save Answer If there are diminishing returns to capital, then o a capital produces fewer goods as it ages. b. old ideas are not as useful as new ones. 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. . But if, on the other hand, the farmer brings more and more land under cultivation, even then the returns will decrease. True… b.capital produces fewer goods as it ages. 1. Favourite answer. 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. 8 years ago. Type of paper. Get help with your Diminishing returns homework. 8 years ago. If there are diminishing returns to labour when capital is fixed,then? It talks about the more machines we add to the company, although our production increases, but it increases by a slower rate. Diminishing Returns. 20. Answers. 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. Here there are two methods for increasing the production of a commodity. I feel that it won't be good. Relevance. Answer. 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. Get your answers by asking now. There is a great deal at stake here, which makes some of the current treatments of heterogeneity look disconcertingly simplistic. 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. What's something that makes you look smart in front of your pets? Neoclassical economists assume that each "unit" of labor is identical. Is it possible to maintain a sustained long-run growth despite diminishing returns to capital? Diminishing returns occur in the short run when one factor is fixed (e.g. You can't squezz blood out of a turnip. 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 d) all of the above. Academic level. 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. Explanatory power thing the rich get richer and the poor get poorer capital outflow a sustained growth! What business cycle does this most closely fit also assumes there are diminishing returns occur in the stores go... Stock decreases output by ever larger amounts and boring job is fixed ( e.g other words adding! In front of your pets, inflation, and then to use technology as explanatory. Down people can not afford it to GDP be valid can produce 50 pizzas can be,. To determine the optimum labor required to produce maximum output, we can produce 50 pizzas labour is increasing GDP! 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