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WAEC Economics 1993 Question 10

Question 10

Theory of Production

Which important economic principle is illustrated by the graph above?

Diagram for this question
  1. A.Law of Comparative Cost
  2. B.Law of Diminishing Marginal Utility
  3. C.Law of Diminishing Returns
  4. D.Malthusian Law of Population
  5. E.Law of Supply.
Show the answer and explanation

Answer: C (Law of Diminishing Returns)

Explanation

Output of maize rises as more men are employed, peaks and then falls: adding a variable factor to fixed land eventually gives diminishing returns.