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ENGR 3360U Winter 2012 Unit 2.1.4: Microeconomics: Law of Diminishing Returns
ENGR 3360U Winter 2012 Unit 2.1.4: Microeconomics: Law of Diminishing Returns
Unit 2.1.4
Microeconomics: Law of Diminishing Returns
Dr. J. Michael Bennett, P. Eng., PMP,
UOIT,
Version 2014-I-01
Change Record
2014-I-01 Initial Creation
2.1-2
2014-I-01
2.1-3
2014-I-01
Farmer Example
Farmer Fred has 10 acres. He can harvest 1000 bushels of wheat
himself. By adding more workers, he can increase production.
The following table illustrates the LODR.
2.1-4
YEAR
# of WORKERS
PRODUCTION
1000
2000
1000
2800
800
3400
600
3800
400
3900
100
3900
2014-I-01
DELTA
2.1-5
2014-I-01
Farmer Example
Farmer Fred has 10 acres. He can harvest 1000 bushels of wheat
himself. By adding more workers and ADD more land,, he can
increase production. The following table illustrates the LOIR2S.
2.1-6
YEAR
LAND
# of WORKERS
PRODUCTION
10
1000
20
2000
1000
30
3200
1200
40
4600
1400
50
6200
1600
60
8000
1800
70
10000
2000
2014-I-01
DELTA
2.1-7
2014-I-01