The principle of diminishing returns implies
1. that an expansion of one type of capital holding
the other types constant will cause its marginal product to fall.
2. that an expansion of one type of capital holding
the other types constant will cause the marginal products of
those other types of capital to rise.
3. that a contraction of one type of capital relative
to other types of capital will cause the marginal product
of the contracting type to rise relative to the marginal
products of the expanding types.
4. that all of the above are true.
Choose the correct option.