The Ricardian notion that of diminishing returns implies that
A)as more input is used more output will be made.
B)as more input is used less output will be made.
C)as more input is used the increase in output will increase.
D)as more input is used the increase in output will decrease.

Question

Quizplus · Accepted Answer

The Ricardian notion of diminishing returns states that as more and more units of a variable input are added to a fixed input, the marginal product of the variable input will eventually decline. In other words, as more input is used, the increase/difference in output will decrease, eventually leading to negative returns. Therefore, the correct answer is choice D.

The Ricardian Notion That of Diminishing Returns Implies That