The marginal rate of substitution of X for У (MRS xy) is, in fact, the slope of the curve at a point on the indifference curve, such as points M, N or P in Fig. 3. Thus MRS xy = ∆Y/∆X It means that the MRS xy is the ratio of change in good Y to a given change in X. Aug 31, 2013 · The law of diminishing returns in production states that as successive units of a variable resource (say, labor) are added to a fixed resource (say, capital or land), beyond some point the extra, or marginal, product that can be attributed to each additional unit of the variable resource will decline. 2. This reflects increasing marginal returns and commonly results when the variable input is able to make increasingly effective use of a given fixed input. For the third worker on, however, marginal product decreases. This reflects decreasing marginal returns and the law of diminishing marginal returns. The marginal product of the third worker is ...
Jul 09, 2013 · Healthcare Is Not Exempt From the Law of Diminishing Returns And ignoring this truth can cost us dearly . Posted Jul 09, 2013 Nov 26, 2020 · 1. Explain how the law of diminishing marginal returns is relevant when developing policies aimed at reducing the growth rate of healthcare expenditures.2. Take a minute to think about the total expenditures of each patient at a hospital. The reason is that increasing marginal cost reflects the law of diminishing marginal returns. As marginal returns decline, marginal cost increases. However, as marginal cost increases, the price a firm needs to receive also increases. The result is a positive relation between price and quantity supplied, which is the law of supply and the ...