The decline in incremental output as equal increments of labor are added to a fixed amount of land is called the law of
A) production.
B) diminishing marginal returns.
C) supply.
D) the land.
E) increasing numbers.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns states that as additional units of a variable input (in this case, labor) are added to a fixed input (land), at some point the marginal product of labor will begin to decline. This means that the additional output produced by each additional unit of labor will be smaller than the previous unit.

The Decline in Incremental Output as Equal Increments of Labor