SIGNIFICANCE OF LAW OF DIMINISHING RETURN Law of Diminishing Returns The Law of diminishing returns is a key one in economics.

It is used to explain many of the ways the economy works and changes. It is a relatively simple idea; spending and investing more and more in a product where one of the factors of production remains the same means the enterprise will eventually run out of steam. The returns will begin to diminish in the long run. If more fertilizer and better machinery are used on an acre of farmland, the yield will increase for a while but then begin to slow and become flat. A farmer can only get so much out of the land, and the more the farmer works, the harder it gets. The economic reason for diminishing returns of capital is as follows: When the capital stock is low, there are many workers for each machine, and the benefits of increasing capital further are great; but when the capital stock is high, workers already have plenty of capital to work with, and little benefit is to be gained from expanding capital further. For example, in a secretarial pool in which there are many more secretaries than computer terminals, each terminal is constantly being utilized and secretaries must waste time waiting for a free terminal. In this situation, the benefit in terms of increased output of adding extra terminals is high. However, if there are already as many terminals as secretaries, so that terminals are often idle and there is no waiting for a terminal to become available, little additional output can be obtained by adding yet another terminal. Another application for this law is in Athletics, for runners, their investment is the time and energy put into training and the yield is hopefully improved fitness. Early in their running careers or early in the training program a couple of weeks of regular training would be rewarded with a considerable increase in fitness. Having achieved a very fit state though, two weeks of regular training will achieve a barely perceptible increase in fitness. But in today¶s world, this famous law seems to have been turned on its head. Now let me apply the law of diminishing return in our lives as a student. I find that the law of diminishing returns is among the most important and useful concept that everyone should understand. In Economics, the law of diminishing returns appears in the topic dealing with costs. Where any additional workers or variable input added in to the production process will lead to a fall in the quantity produced, in the short run or when at least one factor of production is fixed. However the law of diminishing returns doesn't only have relevance in costs. It's also useful for us students to understand this law, as it applies to our study as well. Some of us student will continue to study for many hours hoping to absorb the knowledge from books or class lecture, however with no break time or sufficient rest, the law of diminishing also applies, where the amount of knowledge absorbed will slowly diminish. This means when we student is fresh or just started the lesson, we can absorb the knowledge like a sponge, as the hour passes by, the knowledge will be absorbed less. Another example is when we are doing our exam question. We students will spend a lot of time on one question, believing that the more time or effort spent on the question will mean more marks. At some point, this is true and possible, after a certain point, the effort or time spent may not be worth the effort. For example, lets say there is an essay question which is worth 10 marks. With this mark, we student may have spent 1 hour writing it

The importance of diminishing returns is to allow individuals to understand that there is a stage or point where returns or benefits of doing something will slowly diminish. . This is when the diminishing return sets in.and a lot of effort to produce the answer. it can come to a stage where the information is excessive. . However if we student continue to spend more hours or resources to write it. and it also discourages us students to focus on other important things.

natural disasters. One of the counters of Malthusian theory is that the world population is actually leveling off because of demographic transition. According to Malthus. where all his needs would be fulfilled. Having been a clergy.MALTHUSIAN THEORY OF POPULATION Thomas Robert Malthus was a British economist and demographer. A point would come when human population would reach the limit up to which food sources could support it. Demographic transition states that with greater wealth and education the birth rate decreases. He proposed that human beings adopt measures like infanticide. were nature's way to control population. human society could never be perfected. if human population was allowed to increase in an uncontrolled way. delay in marriage and strict following of celibacy to check population growth. then the number of people would increase at a faster rate than the food supply. In his famous An Essay on the Principles of Population. He believed that man is a lazy animal. as soon as human population would feel constraints in food supply due to increase in population. whose famous Theory of Population highlighted the potential dangers of overpopulation. and war in order to maintain social order and keep the human race from dying out from not having enough resources. who would lead a satisfied life and procreate as long as his family was well fed. and human ingenuity as a factor that overcomes the problem of scarce resources. efficiency. Malthus also doesn't recognize the role of technology. disease. Malthus' theory was based on the assumption that the power of population is much greater than the power of the earth to provide subsistence for man. when unchecked. However. he would again work hard to provide enough for his family. Any further increase would lead to population crash caused by natural phenomena like famine or disease. Based on this theory no action from any party or institution to prevent mass catastrophes or disasters from effecting certain populations because those proportions of the population need to die off in order for the rest of the population to live and have enough resources to survive. Malthus stated that while 'the populations of the world would increase in geometric proportions the food resources available for them would increase only in arithmetic proportions'. Malthusian theory in which people multiply will grow at a rate faster than resources. Such kind of suffering due to overpopulation and food supply was inevitable. population would grow at such a high rate that it would outstrip food supply. According to him. He believed that there are natural checks on the human population like disease. but at the same time man would be back to his complacent stage. Malthus validated his theory on moral grounds that suffering was a way of making human beings realize the virtues of hard work and moral behavior. all over again. In his own words 'passion between the sexes is an inevitable phenomenon' hence. abortion. food shortage and death due to starvation. This might lead to an increase in agricultural production to provide for all. . This would start the cycle of overpopulation and food shortage. In simple words.

.Malthusian population theory was eventually dismissed for its pessimism and failure to take into account technological advances in agriculture and food production.

For example in some Asian countries where 80% of the people are poor. A corporation must face the fact that it has a social responsibility to fulfill. the impact of Trans-National Corporations is being felt in the denudation of forests. The traditional capitalist thinking that profit is the sole motive of business no longer applies. Business in society exists because of Social Will. In less developed countries where Trans-National Corporations are present. it is reasonable to expect that in pursuing these programs it must be able to strike a healthy and well-proportioned balance between profit and social amelioration. particularly the big ones. adverse community image or open people resistance in locations where the companies are involved in mining. malnourished. We all have heard of adverse consequences to companies that pay less attention to their surroundings. however.SOCIAL RESPOSIBILITY OF BUSINESS MANAGEMENT TO SOCIETY Businesses. unnatural soil erosion. the most important realities are widespread poverty. the development of environment-friendly manufacturing processes and the use of available management tools such as a self-assessment model for determining compliance to its social responsibility strategies. They accumulate. All-in-all . it must recognize that it has the community-at-risk directly affected by its operations that needs help. People expect that business must respond to the needs of the community from whom business gets its workforce and profits. uprooting of communities. and the environment. Values. It should allow those who are within its sphere of influence a reasonable access to its resources. are considered the prime resource-holders in society. For example in some far-flung areas of less developed countries. and lack the basic social services. Society permits business to extract the resources that nature has given it since time immemorial. and other similar people empowerment program. grow or spread over fertile areas of opportunities the return of their investments after fulfilling their basic obligations to employees. It cannot selfishly exist by closing its eyes from the reality of the community around it. and environmental challenges. This community-at-risk is the most proximate representation of the general public and reflects the sad plight of the rest of society. quarrying and utilization of scarce natural resources. Going against this expectation can sometimes be disastrous to the business. When business . suppliers and the government and as such serve as pillars to the growth of society. A corporation must have a social conscience. government corruption. It can also undertake initiatives that will harness its core strength in creating sustainable programs for the protection of worker's rights. among others. cooperative organizing. creditors. businesses cannot operate without encountering manpower problems. not through dole-outs but through livelihood programs. Nowadays there are new realities that a company must face and for which new strategies must be formulated in order to keep the business in pace with the changing times. expectations and the role of people have changed. In addition to the immediate public which is its stakeholders. to market products and to provide necessary services to its members with the least side-effects on existing morality. pollution of rivers where small fishermen depend upon for survival. social relationships.

.rethinks its role and applies what its conscience dictates. it is actually preserving the system of democracy and is merely compensating for its existence that is made possible by the Social Will.

Unemployment and underemployment . In the recent years. Worsening Situation . If the economic situation in the Philippines does not change to the better.While the Philippines has been one of Asia's economically stable countries long time ago.The Philippines is overflowing with college graduates who are either unemployed or underemployed. 2. 6.The Philippine economy is becoming worse every day and seems impossible to mend because of problems in the governance. the Philippines has been producing good crops in the past but natural calamities often hit the Philippines and agricultural products have not yielded much. It is surprising to look at the new statistics worldwide about Filipinos. Graft and corruption has become like a cancer that is impossible to cure and the only option for those who want to improve their lives is to apply for a job overseas and provide for their families in the Philippines. more . the opposite is now being experienced. Because most of them are skilled workers. This make Filipinos eager to grab at the good opportunity offered them. Good opportunities offered to Filipino workers . they are often well paid and receive lots of benefits from the companies that they work for. they prefer to apply for a job overseas which usually takes only a few months to one year.As an agricultural country. Bad Economy .Many Filipinos are crying for help yet they are ignored. Natural Calamities . There are millions of affected Filipinos. many Filipinos tried their luck overseas. 5. Filipinos going abroad have increased tremendously. Instead of applying for an uncertain job in the Philippines. Even professionals and skilled workers are going out of the Philippines in order to seek employment elsewhere. then petition their families to join them later. Seeking employment overseas seems the better option. Filipinos are all over the world and they are growing in number every day.One of the highest paid groups of overseas workers are Filipinos. Filipinos have always loved their own country and only a few Filipinos wanted to work overseas but when the economy of the Philippines didn't improve. In the past. What are the reasons why Filipinos go overseas to work? 1. This is driving all Filipinos to apply for better opportunities overseas. The Philippines has millions of people who are hungry and the only way by which they could address their needs is to apply for better jobs overseas. Graft and Corruption . 4. The increase is unbelievable. 3. Some even prefer to become citizens of other countries.BASIC ECONOMIC PROBLEM OF THE PHILIPPINES Filipinos have been flocking to all countries around the world seeking for a greener pasture where they could finally live a better life.

Perhaps this is something that the government should look into. . The Philippines might be brain-drained in the next years to come.Filipinos will go overseas to find for jobs.

the gross national product (written GNP). in recent years. . although the explanation of its constancy is still obscure. Proprietors and rental income includes income of unincorporated businesses. and income payments in kind to domestic servants. Movements in this series. is fairly striking. and professionals. in the income measures of the Department of Commerce. closely parallel those in gross product. the GNP measures rather effectively. as farmers. the main exceptions consisting of an estimated rental value of owner-occupied dwelling units. and so on. rather than of property income (since farmers. if all income in kind were sought to be measured.GROSS NATIONAL PRODUCT VS. as would be expected. as wages and the like are included before taxes. it was declared that gross income Y consisted of the earnings of productive factors received for their productive services plus depreciation and indirect taxes. the market value of goods and services produced over the year. we see that the degree of stability of the percentage of compensation of employees. and landlords perform much of the supervisory work and repair services to their property themselves. there would be literally no stopping place. business property. Its magnitude seems to hover about 65% of the total. The item "net interest" excludes interest on the national debt which. the profit totals must be estimated in the same way. in itself. Within its limitations. National Income Another common measure of economic activity is that of the national income NI. When looked at as the earnings on this output. The inventory valuation adjustment referred to in the table represents an endeavor to eliminate from the profit total all earnings (and losses) due to the influence of fluctuating prices on inventories. Earlier. Deducting the latter totals from gross income yields national income. Only outputs and earnings that enter the exchange process are included in this compilation. and understood. rather than an income. Income taxes represent a claim upon the disposal of income only after the latter is once earned. Corporate profits are those before the deduction of state and federal income taxes. we are probably not too far from the facts if we conclude that labor income of all sorts approaches about 80% of the total. and measurement would be futile. plus house. this has been observed by many investigators as an interesting and important empirical fact. members of the armed forces. NATIONAL INCOME The Gross National Product The concept of the national income and output as consisting of goods and services currently produced and sold--or destined for sale. as are the increments to inventories--is termed. When we examine the percentage of the national income distributed among the different categories. it comprises an endeavor to measure the net output or the annual earnings of the factors of production. is as large again as the interest figure included. homegrown produce. maybe most. As argued earlier. shopkeepers. allowing for statistical errors. In brief. payment. of the proprietors and rental income category consists of labor income. though terming their earnings profits and rents rather than wages). Interest on the national debt is regarded as a form of transfer. it is described as the gross national income GNI. small business men. When we also consider that a good portion.

Rather. A battery of reform measures followed in the epicentres of the crisis. Simply put. The empirical evidence on this claim is ambiguous. for the financial sector almost brought the world economy to its knees. the world economy was brought to the brink of collapse. with a view to reining in the financial sector and correcting market . The result is wealth creation for all. The financial sector. Scanning through the financial press these days. Hence. Many would argue that such measures are necessary. the current rules are prescriptive in nature. therefore. It is not the present purpose to discuss the cause of the global financial crisis. tax rules should not hinder such a measure. Having an uncertainty in such a key area of the regulatory reform undermines the policy response to the crisis of encouraging more widespread use of deferred equity-based compensation in the financial services industry. There is therefore no reason to deny the relief simply because a trust is interposed for legal or commercial reasons. The policy underpinning the deduction rules for equity-based compensation is to give relief to the employer. To ensure its effective implementation. the core function of the financial markets is to allocate resources. is intricately linked with the real economy. While a deduction is given to the employer for the use of treasury shares to fulfil its share delivery obligations under an equity-based compensation plan. for example. Taxation provides income for the government which may use it to invest in public services or to distribute it as money transfers. with the blame squarely pinned on the shoulders of the financial sector. This claim is based on the theoretical assumption that the supply of labor is a positive function of the real wage after tax. which in turn increases productivity and output. They serve as a platform to channel capital from suppliers to users. the use of a trust structure to hold shares purchased from the market to meet future share delivery obligations has not been specifically addressed. It is commonly claimed that tax and especially income tax inhibits productive behavior and thereby growth and poverty reduction. provided it (and the group to which it belongs) incurs an expense in buying back the shares from the market to meet such obligations. Not too long ago. one would not fail to notice the raft of measures that have been proposed globally to rein in the financial services industry. A coherent policy that is properly articulated would go towards enhancing Singapore¶s stature as a financial hub and place of doing business. this article seeks to explore the role of taxation in implementing change. Both parties stand to gain. At the same time all taxes except for lump sum are distortionary meaning that the taxes changes the behavior of people. It is no credit to the law if it cannot adequately deal with the realities of commerce. they do not cater for the many ways in which companies may have organised their plans. The prescriptive nature of the current rules leaves room for argument between taxpayers and tax authorities as to whether a deduction is allowed in such a situation. The suppliers expect a return from investing their capital in productive causes.ROLE OF TAXATION IN DEVELOPMENT The role of taxation in development is controversial. and so do the intermediaries who facilitated this process. while the users apply the funds to upgrade machinery and skills.

failures in the part of the economy that is meant to serve as a resource allocator for the broader society ± but which has. The regulatory and tax landscapes play an important part in their choice of location. today. . it is timely for Singapore to evaluate its tax policy framework to ensure that it is consistent with regulatory objectives. For this reason. These recent events open up an opportunity for Singapore to consider how it may enhance its competitive positioning amid the uncertainty to capture a slice of the global market. evolved into a colossal creature that dwarfs the master it serves. so as to build an institutional framework that is conducive for its development as an international financial centre. as financial institutions evaluate their costs of doing business in established centres like London and New York.

SHORTCOMING OF THE AGRARIAN REFORM PROGRAM The specific agrarian structure and the existing agrarian system are the manifestation of the most appropriate combination of people. only points out changes in the property rights without referring to changes in cultivation. Measures to adapt the agrarian structure take place in small steps over a long period of time. . ownership and tenancy and labour organization as well as changes in land use (reform of land management) belong to these measures. Changes in land tenure i. these retardations in development were most frequently found in the fields of political and social order. it is used today less frequently. investments in agriculture. but they are too mild to balance out serious shortcomings once they have arisen. however. partly. A limited number of landowners still own large parts of the land that they allow small sharecroppers to farm. dependency. the attempt will be made in the following to make this clear. Despite the great population pressure. and lack of equal chances for the majority of the population have their roots in the agrarian structure and the predominant systems. there are great regional differences. They are suited for supporting the continual adoption of the agrarian structure to changing conditions. however. the process of adaption to changed conditions and demands frequently did rot take place rapidly enough. This term. the term 'land reform' was common. subsidies. Many of the farmers have very small farms and are indebted. cultivation is often of a poor quality because the farmers are not given the freedom to make their own decisions or they do rot have adequate access to the necessary services. by sketching the most important problems in the Third World. and technology with the framework of the existing economic and social conditions. This stressing of the economic components should not be deceptive and attract the attention away from the fact that inequality. changes have taken place in the agrarian structure in the last 30 years as a result of agrarian reforms and.. While leaving out many details. setting up extension services. They work mainly be means of incentives such as taxes. In Asia. These shortcomings require not only a change in the land tenure system. but rather in addition also measures for reorganizing land use and management The necessary changes in the agrarian structure can take place various ways.e. etc. Formerly. Owing to the increasing importance within the scope of the struggle for economic development. land. although with certain compensations. the Green Revolution. Along with these. Large sections of the rural population are even landless and usually underemployed. Changes in the agrarian structure are necessary in many parts of the world. they are subject to continual change. In the course of history. but often only the extreme cases have been touched. In the type of shortcomings and the changes that are necessary. The present worldwide striving for rapid economic development has shifted into the focal point of the discussion the hindering factors in the agrarian structure that affect agricultural production and rural development. Agrarian reforms are measures designed to overcome obstacles hindering economic and social development that are the result of shortcomings in the agrarian structure. In earlier times. Agrarian reforms make use of legal force and intervene in the property and land use rights of the people.

radical changes in the traditional agrarian structure with uncompensated redistribution of all rights and usually a drastic regrouping of the society. Thus agrarian revolutions frequently turn into agrarian reforms following the upheaval. They do not differ so much in their goals as in the speed they are forced through and how radical they are. agrarian reforms have the most significance since they can be used as an instrument and shaped according to policy goals. Agrarian reforms as well as agrarian revolutions can have redistribution as well as collectivization as their goals. . The terms 'agrarian reform' and 'agrarian revolution' are frequently not clearly differentiated. For development planning. Agrarian revolutions and socialistic agrarian reforms are not identical.Agrarian revolutions are spontaneous.

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