When more and more workers are applied on the fixed land then the marginal productivity of additional worker will .............. to the total output. |
Rise Become Horizontal Become Vertical Fall |
Fall |
The correct answer is Option (4) → Fall When more and more units of a variable factor (labour) are employed on a fixed factor (land), the marginal productivity of the additional workers eventually falls. This happens due to the Law of Diminishing Marginal Returns, which states that: As more units of a variable factor are combined with a fixed factor, the additional output (marginal product) from each new unit of the variable factor will eventually decrease. At first, total output rises at an increasing rate, then at a decreasing rate, and finally may even decline. |