The theory of diminishing returns and rent is one of the theories that made David Ricardo a famous economist. Ricardo's law of diminishing returns and the theory of rent developed in response to the debate over the Corn Laws. Ricardo assumed that the increase in output from each additional worker decreases as the number of workers increases. The situation will occur when the factor of production saturates the market and by adding more factors of production the market may experience a negative increase. According to David Ricardo, rent is the part of the produce of the land which is paid to the owner for the use of the original and indestructible powers of the soil. Ricardo also makes two hypotheses: the rent on the margin of extensive cultivation and the rent on the margin of intensive cultivation. According to Ricardo, when the rent earned by an owner is due solely to the superior fertility of the land, this rent is called rent on the land. a significant margin and no one pays rent in a newly colonized country where fertile soil is abundant. Rent is production ...