Question

In Appellia, it takes 10 units of resources to increase its output of sugar from 12 tons to 13 tons, but 11 units of resources to increase output from 13 tons to 14 tons, and 12 units of resources to increase output from 14 tons and 15 tons, and so on. The need for increasing resources is an example of

Answer 1

diminishing returns to specialization

Step-by-step explanation:

The law of diminising returns states that with each additional unit of input used in the production process, there will be a point at which additional unit of input will result in less output. Marginal output starts to decrease.

In the given scenario it takes 10 units of resources to increase its output of sugar from 12 tons to 13 tons, but 11 units of resources to increase output from 13 tons to 14 tons, and 12 units of resources to increase output from 14 tons and 15 tons.

There is need of 10 units of input to increase one unit of output, then we need 11 units to do the same, and finally 12 units to increase output by 1.

This is an example of how input increase loses efficacy and it is an example of diminishing returns to specialization.