Final answer:
Knowledge is the factor least likely to display diminishing marginal benefit because it can consistently increase productivity and foster technological advances, unlike tangible resources such as labor and physical capital which are subject to efficiency constraints. The correct option is E.
Step-by-step explanation:
The concept of diminishing marginal benefit suggests that as additional units of a resource are added to production, the benefit from each extra unit will eventually decrease. In the context of the factors of production—land, labor, capital, entrepreneurship, and knowledge—the resource least likely to display diminishing marginal benefit is knowledge. Unlike the more tangible resources such as labor and capital, which can become less productive as more units are utilized without complementary increases in other inputs, knowledge tends to accumulate and can increase productivity consistently.
Knowledge differs from other factors like physical capital or labor, where increasing the amount of these inputs will generally lead to a decline in the marginal product due to limits such as physical capacity and efficiency constraints. Education, a component of human capital, when increased from a tenth-grade level to higher levels of attainment, will provide diminishing incremental output gains. However, continuous improvements in knowledge and technological innovation could offset the diminishment, especially in high-income economies where institutions support ongoing innovation.
Therefore, in response to the student's question, knowledge is the factor that is least likely to experience diminishing marginal benefit, given its non-tangible nature and its role in fostering technological advances and promoting constant growth in productivity, even in high-income countries with a high level of human and physical capital.