One of the largest changes in the economy over thepast several decades is that technological advanceshave reduced the cost of making computers.a. Draw a supply-and-demand diagram to showwhat happened to price, quantity, consumersurplus, and producer surplus in the market forcomputers.b. Forty years ago, students used typewriters toprepare papers for their classes; today theyuse computers. Does that make computersand typewriters complements or substitutes?Use a supply-and-demand diagram to showwhat happened to price, quantity, consumersurplus, and producer surplus in the marketfor typewriters. Should typewriter producershave been happy or sad about the technologicaladvance in computers?c. Are computers and software complements orsubstitutes? Draw a supply-and-demand diagramto show what happened to price, quantity,consumer surplus, and producer surplus in themarket for software. Should software producershave been happy or sad about the technologicaladvance in computers?d. Does this analysis help explain why softwareproducer Bill Gates is one of the world’s richestpeople?
One of the largest changes in the economy over the
past several decades is that technological advances
have reduced the cost of making computers.
a. Draw a supply-and-
what happened to price, quantity,
surplus, and producer
computers.
b. Forty years ago, students used typewriters to
prepare papers for their classes; today they
use computers. Does that make computers
and typewriters complements or substitutes?
Use a supply-and-demand diagram to show
what happened to price, quantity, consumer
surplus, and producer surplus in the market
for typewriters. Should typewriter producers
have been happy or sad about the technological
advance in computers?
c. Are computers and software complements or
substitutes? Draw a supply-and-demand diagram
to show what happened to price, quantity,
consumer surplus, and producer surplus in the
market for software. Should software producers
have been happy or sad about the technological
advance in computers?
d. Does this analysis help explain why software
producer Bill Gates is one of the world’s richest
people?
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