Asked by
Alexis Ramsey
on Dec 17, 2024
Verified
As a result of a labeling mistake at the chemical factory, a farmer accidentally sprays weedkiller rather than fertilizer on half her land. As a result, she loses half of her productive farmland. If the property of diminishing returns applies to all factors of production, she should expect to see
A) an increase in the marginal productivity of her remaining land and an increase in the marginal productivity of her labor.
B) an increase in the marginal productivity of her remaining land and a decrease in the marginal productivity of her labor.
C) a decrease in the marginal productivity of her remaining land and an increase in the marginal productivity of her labor.
D) a decrease in the marginal productivity of her remaining land and a decrease in the marginal productivity of her labor.
Marginal Productivity
The additional output derived from the use of one more unit of a factor of production, holding all other factors constant.
Productive Farmland
Land that is capable of producing a high yield of crops due to its fertility, favorable climate, or efficient management.
- Explain the role of diminishing returns in affecting the marginal productivity and rental prices of factors of production.
Verified Answer
SR
Learning Objectives
- Explain the role of diminishing returns in affecting the marginal productivity and rental prices of factors of production.