Final answer:
The law of diminishing returns states that spending more money on one thing will result in smaller incremental benefits. This principle can be observed in various contexts, such as government spending on reducing crime.
Step-by-step explanation:
The concept that spending more money on one thing means having less money to spend on another is a key economic principle called the law of diminishing returns. This law states that as resources are added to a certain purpose, the marginal benefit from those additional resources will decline. The law of diminishing returns can be seen when allocating resources in various situations, such as government spending on reducing crime. Initially, spending more on crime reduction leads to significant gains, but as the investment increases, the incremental benefits become smaller.