Law of diminishing returns means that marginal product eventually falls when more inputs are added into the production.

Question

BlackTom AI · Accepted Answer

The statement under examination is about the law of diminishing returns. 
Option 1: True. This aligns with the core idea of the law, which holds that when one input is varied while other inputs are held constant, the marginal product of that input eventually declines as more units are added. In other words, after some point, each additional unit of the input contributes less to output than the previous one because fixed inputs constrain efficiency or resource utilization. 
Option 2: False. If this were true, it would imply that marginal product never declines with extra input, which contradicts the standard economic concept that, with a fixed scale of other inputs, additional units of one input typically yield diminishing additional output due to factors like overcrowding, limited technology, or capacity constraints. However, early stages can show increasing marginal returns before diminishing returns set in, meaning the blanket statement that marginal product ever falls is not guaranteed at every level of input unless the law is properly framed as a general tendency over a range of input levels. 
In summary, the truth of the statement depends on understanding the law as describing a typical pattern under ceteris paribus conditions (other inputs fixed) where marginal product eventually declines as more of one input is added, though there can be an initial phase of increasing marginal returns before that decline begins. Given these nuances, the two options contrast the general characterization with an absolute negation, inviting attention to the conditions under which the law applies.

Law of diminishing returns means that marginal product eventually falls when more inputs are added into the production.

View Explanation

Log in for full answers

Similar Questions

Which of the following short run production functions have diminishing marginal returns?

As the amount of capital per labor increases in a country year after year, each addition to capital per worker increases labor productivity by less than the previous addition. This is due to the phenomenon of:

The reason the short-run marginal cost curve eventually increases as output increases for a typical firm is because

Why is the marginal benefit of cleaning up pollution downward-sloping?

In this example, when do diminishing returns set in?

24. In countries with well-developed economies, economic growth tends to:

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler