Question

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. a decrease 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 an increase in the marginal productivity of her labor.c. an increase in the marginal productivity of her remaining land and a decrease 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.

Answer 1

The answer is C.

Step-by-step explanation:

The law of diminishing returns state that, as more successive units of a particular input are added, leaving other inputs constant, then a point will be reached where the output gotten will begin to decline, or increase in a decreasing rate.

From the scenario presented above, we see that chemicals and labor were used. The loss of half of her productive farmland will lead to:

• an increase in the marginal productivity of her remaining land, and
• a decrease in the marginal productivity of her labor.

Marginal productivity of her remaining land will increase because the land will produce, and since she used weedkiller instead of a fertilizer, then whatever is produced will be seen a an increase.

Marginal productivity of her labor will decrease because the amount of labor she used will produce a less than proportionate increase in the level of output.

Answer 2

an increase in the marginal productivity of her remaining land and a decrease in the marginal productivity of her labor.

Step-by-step explanation:

In this scenario half of the farmer's land is damaged due to the application of the weed killer. She will have to increase labour on the damaged land in order to get more returns. So the labour she applies going forward will increase with decreased productivity on both lands combined.

However the marginal productivity of the remaining land will increase because productivity of an asset increases up to a point. She will have more productivity for the remaining half of the land.