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37-397: A snowball may also be a large ball of snow formed by rolling a smaller snowball on a snow-covered surface. The smaller snowball grows by picking up additional snow as it rolls. The terms " snowball effect " and "snowballing" are derived from this process. The Welsh dance " Y Gasseg Eira " also takes its name from an analogy with rolling a large snowball. This method of forming a large snowball

74-571: A candle or a Japanese stone garden lantern known as Yukimi Gata . Snow lanterns are part of winter traditions in countries such as Sweden, Finland, and Norway, where they are created and lit during the Christmas season. These structures illuminate the winter landscape and are associated with festive celebrations in snowy regions. A snowball that turns into a child is a protagonist in a 1969 children's fantasy novel, The Snowball , by Barbara Sleigh . Snowball effect A snowball effect

111-424: A production process as the amount of a single factor of production is incrementally increased, holding all other factors of production equal ( ceteris paribus ). The law of diminishing returns (also known as the law of diminishing marginal productivity) states that in productive processes, increasing a factor of production by one unit, while holding all other production factors constant, will at some point return

148-417: A different process that relies on electrostatic attraction ; these wind-rolled frost balls are known as yukimarimo . Under other rare circumstances, in coastal and river areas, wave action on ice and snow may create beach snowballs or ball ice . A snow lantern is a decorative structure made from snowballs, typically shaped into a hollow cone. It is commonly used as a housing for a light source, such as

185-446: A diminishing or marginally decreasing return. A common example of diminishing returns is choosing to hire more people on a factory floor to alter current manufacturing and production capabilities. Given that the capital on the floor (e.g. manufacturing machines, pre-existing technology, warehouses) is held constant, increasing from one employee to two employees is, theoretically, going to more than double production possibilities and this

222-427: A lower unit of output per incremental unit of input. The law of diminishing returns does not cause a decrease in overall production capabilities, rather it defines a point on a production curve whereby producing an additional unit of output will result in a loss and is known as negative returns. Under diminishing returns, output remains positive, but productivity and efficiency decrease. The modern understanding of

259-428: A single unit of a good generally increases as a society attempts to produce more of that good. This explains the bowed-out shape of the production possibilities frontier . Part of the reason one input is altered ceteris paribus , is the idea of disposability of inputs. With this assumption, essentially that some inputs are above the efficient level. Meaning, they can decrease without perceivable impact on output, after

296-415: A solid is melted by pressure and then re-frozen. When forming a snowball by packing, the pressure exerted by the hands on the snow is a determinant for the final result. Reduced pressure leads to a light and soft snowball. Compacting humid or "packing" snow by applying a high pressure produces a harder snowball, sometimes called an ice ball, which can injure an opponent during a snowball fight. Temperature

333-418: Is a process that starts from an initial state of small significance and builds upon itself (an exacerbating feedback ), becoming larger (graver, more serious), and also perhaps potentially more dangerous or disastrous (a vicious circle ), though it might be beneficial instead (a virtuous circle ). This is a cliché in cartoons and modern theatrics , and it is also used in psychology . The common analogy

370-999: Is a significantly increasing rate of return. But, if you gave the same increase to a wealthy family, the impact it would have on their life would be minor. Therefore, the rate of return provided by that average increase in income is diminishing. Signify O u t p u t = O   ,   I n p u t = I   ,   O = f ( I ) {\displaystyle Output=O\ ,\ Input=I\ ,\ O=f(I)} Increasing Returns: 2 ⋅ f ( I ) < f ( 2 ⋅ I ) {\displaystyle 2\cdot f(I)<f(2\cdot I)} Constant Returns: 2 ⋅ f ( I ) = f ( 2 ⋅ I ) {\displaystyle 2\cdot f(I)=f(2\cdot I)} Diminishing Returns: 2 ⋅ f ( I ) > f ( 2 ⋅ I ) {\displaystyle 2\cdot f(I)>f(2\cdot I)} There

407-684: Is a widely recognised production function in economics: Q= f(NR, L, K, t, E) : Start from the equation for the marginal product: Δ O u t Δ I n 1 = f ( I n 2 , I n 1 + Δ I n 1 ) − f ( I n 1 , I n 2 ) Δ I n 1 {\displaystyle {\Delta Out \over \Delta In_{1}}={{f(In_{2},In_{1}+\Delta In_{1})-f(In_{1},In_{2})} \over \Delta In_{1}}} To demonstrate diminishing returns, two conditions are satisfied; marginal product

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444-427: Is an inverse relationship between returns of inputs and the cost of production, although other features such as input market conditions can also affect production costs. Suppose that a kilogram of seed costs one dollar , and this price does not change. Assume for simplicity that there are no fixed costs . One kilogram of seeds yields one ton of crop, so the first ton of the crop costs one dollar to produce. That is, for

481-460: Is called increasing returns. If 50 people are employed, at some point, increasing the number of employees by two percent (from 50 to 51 employees) would increase output by two percent and this is called constant returns. Further along the production curve at, for example 100 employees, floor space is likely getting crowded, there are too many people operating the machines and in the building, and workers are getting in each other's way. Increasing

518-417: Is growing rapidly, but this will not continue forever (exponentially). Constraints such as resources will see the population growth stagnate at some point and begin to decline. Similarly, it will begin to decline towards zero but not actually become a negative value, the same idea as in the diminishing rate of return inevitable to the production process. The concept of diminishing returns can be traced back to

555-413: Is important for snowball formation. It is hard to make a good snowball if the snow is too cold. In addition, snowballs are difficult to form with dry powdery snow. In temperatures below 0 °C (32 °F), there is little free water in the snow, which leads to crumbly snowballs. At 0 °C (32 °F) or above, melted water in the snow results in a better cohesion. Above a certain temperature, however,

592-446: Is often used to create the components needed to build a snowman . The underlying physical process that makes snowballs possible is sintering , in which a solid mass is compacted while near the melting point. Scientific theories about snowball formation began with a lecture by Michael Faraday in 1842, examining the attractive forces between ice particles. An influential early explanation by James Thomson invoked regelation , in which

629-554: Is positive, and marginal product is decreasing. Elasticity , a function of input and output, ϵ = I n O u t ⋅ δ O u t δ I n {\displaystyle \epsilon ={In \over Out}\cdot {\delta Out \over \delta In}} , can be taken for small input changes. If the above two conditions are satisfied, then 0 < ϵ < 1 {\displaystyle 0<\epsilon <1} . This works intuitively; There

666-402: Is required and therefore smaller engines, resulting in a greater weight saving than the original reduction. This iteration can be repeated several times, although the decrease in weight gives diminishing returns . The startup process of a feedback electronic oscillator , when power to the circuit is switched on, is a technical application of the snowball effect. Electronic noise is amplified by

703-435: Is with the rolling of a snowball down a snow-covered hillside. As it rolls the ball will pick up more snow, gaining more mass and surface area, and picking up even more snow and momentum as it rolls along. In aerospace engineering , it is used to describe the multiplication effect in an original weight saving. A reduction in the weight of the fuselage will require less lift, meaning the wings can be smaller. Hence less thrust

740-615: The ability to influence economic growth and can eventually limit or inhibit continuous exponential growth. Therefore, as a result of these constraints the production process will eventually reach a point of maximum yield on the production curve and this is where marginal output will stagnate and move towards zero. Innovation in the form of technological advances or managerial progress can minimise or eliminate diminishing returns to restore productivity and efficiency and to generate profit. This idea can be understood outside of economics theory, for example, population. The population size on Earth

777-468: The concept of exponential growth . It is commonly understood that growth will not continue to rise exponentially, rather it is subject to different forms of constraints such as limited availability of resources and capitalisation which can cause economic stagnation . This example of production holds true to this common understanding as production is subject to the four factors of production which are land, labour, capital and enterprise. These factors have

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814-545: The concept of diminishing returns to land rent. These works were relevant to the committees of Parliament in England, who were investigating why grain prices were so high, and how to reduce them. The four economists concluded that the prices of the products had risen due to the Napoleonic Wars , which affected international trade and caused farmers to move to lands which were undeveloped and further away. In addition, at

851-436: The concerns of early economists such as Johann Heinrich von Thünen , Jacques Turgot , Adam Smith , James Steuart , Thomas Robert Malthus , and David Ricardo . The law of diminishing returns can be traced back to the 18th century, in the work of Jacques Turgot. He argued that "each increase [in an input] would be less and less productive." In 1815, David Ricardo, Thomas Malthus, Edward West , and Robert Torrens applied

888-493: The disruption of the entire production process as additional units of labor are added to a fixed amount of capital. The law of diminishing returns remains an important consideration in areas of production such as farming and agriculture. Proposed on the cusp of the First Industrial Revolution , it was motivated with single outputs in mind. In recent years, economists since the 1970s have sought to redefine

925-491: The end of the Napoleonic Wars, grain imports were restored which caused a decline in prices because the farmers needed to attract customers and sell their products faster. Classical economists such as Malthus and Ricardo attributed the successive diminishment of output to the decreasing quality of the inputs whereas Neoclassical economists assume that each "unit" of labor is identical. Diminishing returns are due to

962-413: The first ton of output, the marginal cost as well as the average cost of the output is per ton. If there are no other changes, then if the second kilogram of seeds applied to land produces only half the output of the first (showing diminishing returns), the marginal cost would equal per half ton of output, or per ton, and the average cost is per 3/2 tons of output, or /3 per ton of output. Similarly, if

999-510: The initial stages. The point in the process before returns begin to diminish is considered the optimal level. Being able to recognize this point is beneficial, as other variables in the production function can be altered rather than continually increasing labor. Further, examine something such as the Human Development Index , which would presumably continue to rise so long as GDP per capita (in purchasing power parity terms)

1036-504: The law adds the dimension of holding other outputs equal, since a given process is understood to be able to produce co-products. An example would be a factory increasing its saleable product, but also increasing its CO 2 production, for the same input increase. The law of diminishing returns is a fundamental principle of both micro and macro economics and it plays a central role in production theory . The concept of diminishing returns can be explained by considering other theories such as

1073-451: The manner of excessive fertiliser on a field. If input disposability is assumed, then increasing the principal input, while decreasing those excess inputs, could result in the same "diminished return", as if the principal input was changed certeris paribus . While considered "hard" inputs, like labour and assets, diminishing returns would hold true. In the modern accounting era where inputs can be traced back to movements of financial capital,

1110-421: The number of employees by two percent (from 100 to 102 employees) would increase output by less than two percent and this is called "diminishing returns." After achieving the point of maximum output, employing additional workers, this will give negative returns. Through each of these examples, the floor space and capital of the factor remained constant, i.e., these inputs were held constant. By only increasing

1147-426: The number of people, eventually the productivity and efficiency of the process moved from increasing returns to diminishing returns. To understand this concept thoroughly, acknowledge the importance of marginal output or marginal returns . Returns eventually diminish because economists measure productivity with regard to additional units (marginal). Additional inputs significantly impact efficiency or returns more in

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1184-459: The oscillator circuit and returned to its input filtered to contain primarily the selected (desired) frequency, gradually getting stronger in each cycle, until a steady-state oscillation is established, when the circuit parameters satisfy the Barkhausen stability criterion . Diminishing returns In economics , diminishing returns are the decrease in marginal (incremental) output of

1221-408: The result of the lived experience in England after the war. It was developed by observing the relationship between prices of wheat and corn and the quality of the land which yielded the harvests. The observation was that at a certain point, that the quality of the land kept increasing, but so did the cost of produce etc. Therefore, each additional unit of labour on agricultural fields, actually provided

1258-431: The snowball becomes slush , which lacks mechanical strength and no longer sticks together. This effect is used in the rule that, in skiing areas, there is a high risk of avalanche if it is possible to squeeze water out of a snowball. Under certain unusual circumstances, natural snowballs form as a result of wind, without human intervention. These circumstances are: In Antarctica, small windblown frost balls form through

1295-487: The theory to make it more appropriate and relevant in modern economic societies. Specifically, it looks at what assumptions can be made regarding number of inputs, quality, substitution and complementary products, and output co-production, quantity and quality. The origin of the law of diminishing returns was developed primarily within the agricultural industry. In the early 19th century, David Ricardo as well as other English economists previously mentioned, adopted this law as

1332-409: The third kilogram of seeds yields only a quarter ton, then the marginal cost equals per quarter ton or per ton, and the average cost is per 7/4 tons, or /7 per ton of output. Thus, diminishing marginal returns imply increasing marginal costs and increasing average costs. Cost is measured in terms of opportunity cost . In this case the law also applies to societies – the opportunity cost of producing

1369-407: Was increasing. This would be a rational assumption because GDP per capita is a function of HDI. Even GDP per capita will reach a point where it has a diminishing rate of return on HDI. Just think, in a low income family, an average increase of income will likely make a huge impact on the wellbeing of the family. Parents could provide abundantly more food and healthcare essentials for their family. That

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