Economics essay Example | Topics and Well Written Essays - 2000 words

Economics - Essay ExampleHowever, the firms often prefer to expend machines instead of human labour as they believe that the work can be done more efficiently as compared to the human labour. The researcher by dint of this paper would aim to discuss about the concept of diminishing marginal returns to workers. This paper would offer the researcher a scope to discuss about the transaction practices using the concepts of Economics.Law of diminishing return states that in case if equal quantities of one variable factor are increased, whereas, the other factor remains constant, at that place is a point in the economy beyond which if an extra unit of the variable factor added leads to diminishing return and fall in marginal carnal product (Black and Lynch, 2001). The main reason behind this is that as one of the factors is held fixed and the other factor is increased, the proportions of the factors change. As the proportion of variable factor increases, the factor proportions gravel appropriate for carrying out the production within the economy and the marginal product increases. However, the researcher says that after a certain level, the production system becomes too frequently crowded with variable inputs and the factor proportions cannot be utilised for the production (Edvinsson, 2002). According to a researcher, an increase in proportions of the labour as well as the expectant within the agricultural land for cultivation raises the output depending on the amount of input within the production process (Black and Lynch, 2001). However, in the agricultural process in that respect are changes that may arise due to improvement in technology as well as the factor proportions. Technology within the agricultural study deals with the use of new and improved variety of crops for production and also the use of better quality fertilizers for proper cultivation. The integrity of diminishing returns is also referred to as the law of variable proportions within the economy (Lopez, Vaya and Artis, 2004). According to another researcher