Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 7, Problem 2.4P
To determine
Production technology.
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Please, assume that At is a technological variable, as reflected in the production functions where capital and labor factors are used too
A positive technological change will
Group of answer choices
shift the per-worker production function down.
move the economy along a given per-worker production function to the left.
shift the per-worker production function up.
move the economy along a given per-worker production function to the right.
The difference between technology and technological change is that technology refers to the processes used by a firm to transform inputs into output while technological change is a change in a firm's ability to produce a given level of output with a given quantity of inputs. technology is carried out by firms producing physical goods but technological change is an intellectual exercise into seeking ways to improve production. technology is product-centered, that is, developing new products with our limited resources while technological change is process-centered in that it focuses on developing new production techniques. technology involves the use of capital equipment while technological change requires the use of brain power.
Chapter 7 Solutions
Principles of Economics (12th Edition)
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- Imagine you own your own business. Based on what you learned from the simulation, what factors would determine your entry and exit into a market? Applying the concept of marginal costs, how would you, as a business owner, decide how much to produce? How does the impact of fixed costs change production decisions in the short run and in the long run? Refer to the average total-cost (ATC) model included in the textbook to demonstrate.arrow_forwardWhat is the relationship between economies of scale and intra-industry trade? Group of answer choices Intra-industry trade brings competition and diverse products to markets where economies of scale would otherwise promote fewer firms and fewer product options Intra-industry trade reduces competition and product variety in markets where economies of scale would otherwise promote competition and diverse products. As average total cost increases, intra-industry trade increases As average total cost decreases, intra-industry trade decreases.arrow_forwardWhat is one negative aspect of technology on productivity? Technology allows for more products to be made in a shorter amount of time. Technology allows companies to reduce the cost of making products. Technology allows for more efficient ways to produce goods. This may lead to the elimination of jobs. Technology allows for workers to work from home, which leads to fewer call-offs due to illness, inclement weather, or childcare-related issues.arrow_forward
- Refer to Figure 11-1. Diminishing marginal returns is illustrated in the per-worker production function in the figure above by a movement up along any of the production functions. from Production function 1 to Production function 2. from Production function 1 to Production function 3. from Production function 2 to Production function 1.arrow_forwardImagine you own your own business. Based on what you learned from the simulation, what factors would determine your entry and exit into a market? Applying the concept of marginal costs, how would you, as a business owner, decide how much to produce? How does the impact of fixed costs change production decisions in the short run and in the long run? Refer to the average total-cost (ATC) model included in the textbook to demonstrate. Have at least a few sentences for each response please.arrow_forwardThe long-run is a period of time long enough so that all inputs, including facility and equipment, are variable, while in the short run at least one input is fixed. Think about how much time it would take to change the scale of operation for a restaurant, for an automobile plant, for a website designing company... Does it seem that the amount of time that separates the long run from the short run is industry-specific, rather than a set period of time?arrow_forward
- Which of the following is true: Long Run Average Total Costs are always smaller or equal to Short Run Average Total Costs Long Run Average Total Costs are always greater or equal to Short Run Average Total Costs . It is not possible to conclude what is the relationship between Long Run Average Total Costs and Short Run Average Total Costsarrow_forwardThe concept of ‘constant returns to scale’ implies that, if the state of technology (A) remains constant, an increase of x times in both the capital (K) and the amount of labour (N) will lead to an increase of x times in the output.arrow_forwardSuppose the return and cost of entrepreneurship curves are described by the following equations (with numbers measured in the thousands): R=1,100−100N C=100+150N, where R=returns to entrepreneurship, C=cost of entrepreneurship, and N=number of entrepreneurs. The equilibrium number of entrepreneurs is N=...... thousand. (Round your response to two decimal places.) The equilibrium returns to entrepreneurship is R=$..... thousand. (Round your response to two decimal places.) The government enacts a license fee of $100 thousand to file the paperwork necessary to start a firm. The new equilibrium number of entrepreneurs is N=....... thousand. (Round your response to two decimal places.) The new equilibrium returns to entrepreneurship is R=$...... thousand. (Round your response to two decimal places.)arrow_forward
- What is meant by technological advance, as broadly defined? How does technological advance enter into the definition of the very long run? Which of the following are examples of technological advance, and which are not: an improved production process; entry of a firm into a profitable purely competitive industry; the imitation of a new production process by another firm; an increase in a firm’s advertising expenditures?arrow_forwardWe often work with production technologies that give rise to initially increasing marginal product of labor that eventually decreases. Are the following statements then True or False? Explain.A negative marginal product of labor necessarily implies a downward sloping production frontier at that level of labor input.arrow_forwardOutput is produced according to a production process given by: Q = 4LK, where L is the quantity of labor input and K is the quantity of capital input. If the price of K is $10 and the price of L is $5, then what is the cost-minimizing combination of K and L capable of producing 32 units of output?arrow_forward
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