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Land utilisation

  LAND UTILIZATION  Land is a scarce resource, whose supply is fixed for all practical purposes. At the same time, the demand for land for various competing purposes is continuously increasing with the increase in human population and economic growth.Land use pattern at any given time is determined by several factors including size of human and livestock population, the demand pattern, the technology in use, the cultural traditions, the location and capability of land, institutional factors like ownership pattern and rights scale regulation. Major Types of Land Utilization in India : As in all other countries, land in India is put to various uses. The utilization of land depends upon physical factors like topography, soil and climate as well as upon human factors such as the density of population, duration of occupation of the area,land tenure and technical levels of the people.There are spatial and temporal difference in land utilization due to the continued interplay of phys...
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LAW OF DIMINISHING RETURNS

LAW OF DIMINISHING RETURNS

Meaning : The law of diminishing returns is one of old laws in economics. Sir Edward West was the first to explain the law. Some classical economists like David Ricardo studied it with the reference to agriculture.

Statement : The law of diminishing returns states that when an additional variable factor is applied keeping other factors fixed the marginal return from it must eventually diminish .

Explanation : The law can be explained with the help of an example. Suppose, the farmer has certain amount of labour(L) and capital (K) used on fixed factor land. As a result of increased number of employees on the land, the total production shall increase but the increments to the total production will go on diminishing with the addition of every dose.

Units of l & k.         TP.           AP.           MP
            1.                   12.           12.           12
            2.                   16.             8.             4
            3.                   19.             6.             3
            4.                   21.             5.             2
            5.                   22.             4.             1

Here, TP starts increasing from 12 to 16 and continues increasing on but AP after addition of extra labour and capital keeps falling on. Following AP consequently leads to the MP which also keeps on falling with the extra units of labour and capital . In this table , it can be seen tha AP is falling and MP is also falling but at a faster rate. This is called as the law of diminishing returns .

Assumptions
a)The law assumes the proportion in which factors of production are put to use to be changeable.
b)The law is based on the assumption of short run period.
c)It is assumed that different units of variable factor of production are homogenous in quality and quantity.
d)The law can be stated in terms of cost only if price of variables inputs and outputs remain constant.
e)The law is based on the assumption that the technology will remain constant. 

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