Question

consider one of your household activities (e.g., cooking, cleaning, lawn work) as a production process. I need to identify the inputs and steps in providing this good or service, and briefly discuss the opportunity cost of doing it yourself relative to hiring someone to do it.

• Then, describe the role those diminishing returns plays in your decision.

Answer 1

Let us take The household work of GARDENING as an example of production process.

1. INPUTS: The inputs needed for this activity are seeds, manure, pesticides, fertilizers, gardening trimmer, hand gloves, sickle, fungus controller, etc.

2. STEPS: a) Firstly a garden layout has to be set up. b) Then we need to obtain good seeds, required equipment and other supplies. c) The soil has to be prepared before putting the seeds. d) The seeds are then sown. e) Weeds ahve to be kept down. f) Control pests using good pesticides. g) water everyday h) Harvest at peak season

3. OPPORTUNITY COST: The opportunity cost of home gardening is the fee that would have to be paid to the gardener who would have been appointed in case you did not do home gardening. This is the amount you can save.

4. ROLE OF DIMINISHING RETURNS: If you decide to go for home gardening, gardually you will be tired and might not receive as much satisfaction and happiness in doing it as you got in the initial stages. Hence you will start losing interest in planting yourself. This is the result of diminishing returns of doing gardening yourself instead of hiring someone to do it.