“Diminishing Returns” is a concept, or more precisely, an empirical finding that shows up in a variety of places in microeconomics. We first encountered it in the module on utility, and then again in this module on production and costs.
What do economists mean by “diminishing returns” to an input? What causes diminishing returns? Have you ever observed this principle at work in a job you’ve had? Describe how you’ve experienced this concept in the real world.