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Paper 1 · November 1995 · Farm Management and Economics

Which economic principle is shown by the graph below?

Asupply curve
Bdemand curve
Cdiminishing returns
Dopportunity costs

Explanation

The graph plots crop yield against fertilizer applied. Yield climbs steeply at first, then flattens, then falls away as more fertilizer goes on. That rise-and-fall shape is the law of diminishing returns: each extra unit of a variable input added to fixed land eventually adds less, and then subtracts. A demand curve would slope downwards throughout and would have price on the vertical axis, not yield.

ZIMSEC Agriculture 5035/1 Paper 1, November 1995, Q25

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