There is a famous economics saying that argues "if diminishing marginal productivity never set in then the world could be fed from a flower pot." Explain what this means economically
What will be an ideal response?
What this is saying is if diminishing marginal productivity doesn't hold then it would be possible to add more labor and more seed and fertilizer to the flower pot and one would be able to grow as much food as one desired without limit. Of course we know that the flower pot itself is a real limitation and that adding more labor, seed and fertilizer will quickly lead to diminishing returns.
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Refer to the figure above. Which of the following statements is true?
A) Ryan has a comparative advantage in the production of Good 1, whereas Tom has a comparative advantage in the production of Good 2. B) Ryan has a comparative advantage in the production of Good 2, whereas Tom has a comparative advantage in the production of Good 1. C) Ryan has a comparative advantage in the production of both the goods. D) Tom has a comparative advantage in the production of both the goods.
Peter Piper picks a peck of pickled peppers using 10 units of labor and two pepper-picking machines. The last worker hired picked 100 peppers, and the last machine added 1,000 peppers. If labor can be hired at $5 a pepper picker and machines cost $5,000 . what advice do you have for Peter Piper?