TRANSACTIONS OF SECTION F. 593 
The following problems are based upon the above table :— 
Problem 1.—Assuming that the labour of a man and team, with the appro- 
priate tools, costs a farmer 20s. a day, and that corn is worth 1s. Gd. a bushel, 
how many days of such labour could he most profitably devote to the cultivation 
of each of the four fields, assuming that they are all the land which he has at his 
disposal ? 
Ew would the problem be affected if labour cost 10s, a day instead of 20s. ? 
Problem 2.—Assuming that the farmer has 200 days’ labour, and no more, 
which he can devote to corn growing, but that he can have, rent free, an inde- 
finite quantity of land of the grade of field A, how many acres could he most 
profitably make use of for corn growing ? 
How would the problem be affected if he had to pay a rental of 30s. an acre ? 
Problem 3.—Assuming that the two fields A and C belong to the same farmer, 
and that he has but 20 days’ labour which he can devote to their cultivation, 
how could these 20 days be most profitably distributed between them? How 
could 25 days be most profitably distributed? 35 days? 50 days? 60 days? 
70 days? 90 days? 
Problem 4.— Assuming that the relation of the labour-supply to the land- 
supply is such that 130 days’ labour, of the kind assumed in the table, will seek 
employment upon the four fields A, B, C, and D, what would be the normal rate 
of wages, ¢.e., what is the highest rate at which the farmers would find it to their 
advantage to employ the entire labour-supply—corn being worth 1s, 6d. a bushel ? 
What would be the normal rental of each field ? 
How would wages and rent be affected if the labour-supply were 170 days 
instead of 130? 
Advantages of this method :— 
1. A test of the clearness of the student’s understanding of economic principles 
and therefore an antidote against slip:hod thinking. 
2. It furnishes the future man of affairs with formule to which he may 
profitably adapt his system of accounting. : 
3. More comprehensible, though less compact, than algebraic or trigono- 
metric formule. 
4. It places certain questions beyond the field of controversy. 
2. The Laws of Increasing and Decreasing Returns in Production and 
Consumption. By Professor S. J. Cuapman, V.A., M.Com. 
The expressions ‘ daw of increasing returns’ and ‘ law of diminishing returns’ 
are very loosely used. The author aimed at giving definiteness to these conceptions, 
and inquired whether on @ prior? grounds such laws can be predicated of actual 
conditions, that is, realistically and not merely in a highly abstract sense, and, 
further, whether analogous tendencies operate in consumption. 
First it was pointed out that the field of production, whether industrial or 
agricultural, is organised in a hierarchy of diverse systems which may be classified 
into three orders corresponding to ‘the business,’ ‘the industry,’ and ‘the 
community.’ 
The argument proceeded by deduction from the abstract laws of increasing and 
diminishing returns. The former may be represented as a law of specialism, and 
runs: As a factor in production which is capable of specialising is increased its 
productive power is increased. It is found that when it is phrased merely in this 
general fashion no law of diminishing returns can be predicated realistically on 
deductive grounds. Further inquiry shows, however, that a clause may be added to 
the effect that the return in productivity of a specialisable factor in response to its 
tnerease must be subject at some stage to diminishing returns and ultimately become 
_ insignificant. The abstract law of diminishing returns calls for little discussion. 
It is enunciated as follows: If the part of a group of factors which yield a 
1907. QQ 
