They both decrease at a decreasing rate. 10.11 Diminishing productivity is usually said to begin when average product starts to diminish. Alternatively, you might say that diminishing productivity sets in when marginal product begins to diminish. Either way, total product continues to rise as long as marginal product is positive. Thus the variable input may be used efficiently until marginal product becomes zero or negative.
Output is held constant but the inputs are variable.
A diminishing MRT means concavity of the production possibilities curve. No, fixed proportions are a condition for measuring the response in output to changes in all inputs as the firm moves along a ray. The log-linear seems to fit the data fairly well. The R 2 s are both fairly high, and all the estimated coefficients are statistically significant. Of course, the equation for cotton fits better than the one for sugar.