Question

Which of the following is an example of the law of diminishing marginal returns?

A. Increasing production leads to higher profits
B. Hiring more workers increases overall productivity
C. Adding more fertilizer increases crop yield
D. Overusing a resource leads to a decline in productivity

Answer 1

The law of diminishing returns states that as additional units of a variable input are added to a fixed input, the marginal product of the variable input will decrease. Overusing a resource is an example of the law of diminishing returns because it leads to a decline in productivity. So, the correct answer is option d.

Step-by-step explanation:

The law of diminishing returns is an economic principle that states that as additional units of a variable input are added to a fixed input, the marginal product of the variable input will eventually decrease. This means that the additional output gained from each additional unit of input will be smaller and smaller.

An example of this can be seen in choice D, where overusing a resource leads to a decline in productivity. As more and more of the resource is used, the additional output gained will eventually start to decrease.

So, the correct answer is option d.