00:01
In this question, they ask us with diminishing returns, as capital per worker increases, what happens to the output per worker? well, it turns out with diminishing returns, as the capital per worker increases, the output per worker continues to increase, but it does so at a diminishing rate.
00:27
So essentially what's happening is the output per worker has a maximum, it has a horizontal asymptote.
00:40
So if i have my capital per worker on the horizontal axis, and i have my output per worker on the vertical axis, what happens is, as we increase the amount of capital, the output per worker is going to increase.
01:09
However, there's only so much output that any individual worker can ever create.
01:17
And so although we increase with more capital employed, the output that we're getting is bumping up against a horizontal asymptote.
01:30
There is a maximum to the output per worker in most typical circumstances.
01:36
And so although we are increasing that output per worker, we're doing so at a diminishing rate...