Lesson Glossary
inverse relationship
A negative association between two variables where when one variable is increased the other decreases, and when one variable is decreased the other increase. .
direct relationship
A positive association between two variables where when one variable is increased the other variable also increases, and when one variable is decreased the other also decreases.
law of diminishing returns
The eventual decline in the rate of extra outputs produced that occurs when one input used in production of the output is held constant and the others are increased.
law of increasing returns to scale
The increase in the rate of extra outputs produced when all inputs used in production are increased and no inputs are held constant.