The opening example does not demonstrate diminishing returns. Posted this comment when this arricle was submitted before http://news.ycombinator.com/item?id=15

The opening example does not demonstrate diminishing returns. Posted this comment when this arricle was submitted before http://news.ycombinator.com/item?id=1508600 http://news.ycombinator.com/item?id=1508600 Diminishing returns says that as you increase a factor of production the output relative to tha increase becomes smaller. In other worse return per unit investment gets smaller with each increase becomes smaller. In other worse return per unit investment gets smaller with each marginal investment. The author totally gets this concept wrong with the bowl of nuts analogy. If you are using one hand to look for pecans in a bowl of nuts and the pecans become harder to find over time, then this does not demonstrate diminishing returns because no factor of production was modified.