Ricardo assumes the law of diminishing ________.
Last updated Jun 24, 2026
Correct Answer:
Option B —
marginal returns
Understanding Ricardo’s LawDavid Ricardo, a classical economist, applied the Law of Diminishing Marginal Returns primarily to agriculture.
The Principle: As more units of a variable factor (like labor or capital) are added to a fixed factor (like a specific plot of land), the additional output generated by each new unit will eventually decrease.
Why it Happens: Ricardo argued that since the supply of fertile land is fixed, as a population grows, farmers are forced to either:
Cultivate the same land more intensely (Intensive Margin).
Move to less fertile "marginal" land (Extensive Margin).
The Result: In both cases, the cost of producing an extra unit of grain increases because the marginal productivity of the inputs decreases.
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
More Economy questions
From across UPSC, JKPSC, and JKSSB papers — same subject, different years.
Consider the following statements:Statement-I: If the United States of America (USA) were to default on its debt, holders of US Treasury ...
Which is not one of the four main factors of production?
Classifications under social accounting include:
GST was implemented on
All companies sell identical products; market share does not influence price. This is a situation of ________________.