Question

Suppose that a farmer is growing wheat on 1 acre of land. One year he plants a certain number of seeds and harvests a certain amount of wheat. The following year, he decides to double the amount of seeds planted. In return, he observes that his wheat harvest also doubled. The farmer is amazed by the fact that he doubled the amount of seeds and it led to a doubling of the harvest! He begins thinking to himself:

"It would be possible to feed the entire world population by simply growing more and more wheat on my land. I could end world hunger as we know it!"

Even if we assume an infinite supply of wheat seeds, why would this not be possible? Carefully construct an argument based on production economics in answering the question. (Simply restating that it is not possible does not give credit).

Answer 1

Diminishing returns, also called law of diminishing returns or principle of diminishing marginal productivity, economic law stating that if one input in the production of a commodity is increased while all other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.

The farmer cannot grow infinite amounts of wheat since everytime he plants more wheat, his output will reduce since he is only increasing one factor while keeping the rest constant.Even if we assume an infinite supply of wheat seeds, the farmer's limited land can only grow a certain number of wheat crops regardless of the number of the wheat seeds planted.