We tend to become obsessed with things that get more expensive over time college tuition, say, or health care. But lots of things have actually gotten cheaper in real terms, such as things made by machines consumer electronics. Some new gadget comes out with a $1,000 price tag. Two years later it costs $500.

There's no law of nature that says this must be so, and yet it happens year after year Do you think production in the real world, in the short run, exhibits increasing marginal returns or diminishing marginal returns? Give an example.