Explain brieflya)The law of diminishing marginal returnsb)short-run&long run costsc)Total cost &marginal cost.

Question

answer should base on micro economics

Answer 1

The law of diminishing marginal returns states that each additional unit of a variable input yields less and less returns. For example, let's take a factory. With 50 laborers, perhaps the factory can make 200 pins. If we add 50 more laborers, the factory can make 300 pins. Thus, the additional 50 workers only added 100 pins. If we add 50 more, we are down to 350 pins. And if we add 50 more, we make only 325. That situation is negative returns, and could be that the workers are bumping into each other and productivity is being diminished.

Short run costs are variable costs, such as labor, inventory used in production, etc. In the short run, these inputs can be scaled back.

Long run costs are your fixed costs. This could be a factory or some other facility. In the short run, the costs associated with this cannot be scaled back.

Total cost is your fixed cost plus your variable costs.

Marginal cost is the additional cost required to make one additional unit.

Answer 2

The law of diminishing marginal returns simply states that the first few increases of an input, x, leads to larger amounts of output, y. However, as you increase x your y amount will be smaller and smaller with every increase. ie) x = 1, y = 5 ; change = 0 x = 2, y = 10 ; change = 5 x = 3, y = 12 ; change = 2 x = 4, y = 13 ; change = 1 as you can see the change per increase in x is decreasing, or diminishing. In macroeconmics, you can refer to the sollow growth model where the savings curve is a concave curve with the DMR property. If you know your calculus it is simply as x approaches infinite the slope is 0.