In 1975 a pocket calculator cost more than $50; in 1990 a calculator of the same quality cost less than $10 . Which of the following explanations is most consistent with these facts?
a. Intense competition in the calculator industry caused the supply curve for calculators to shift to the left, depressing the price.
b. An increase in the demand for calculators led to the price drop
c. An improvement in technology caused the supply of calculators to increase, depressing their price.
d. As the population grew, fewer expensive calculators were needed, causing prices to fall.
c
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Refer to Figure 9.2. Whenever a CD is sold, 5% of the revenue goes to the artist and the remainder of the revenue goes to the record company. The graph above depicts R, the total revenue from sales; (0.95)R, the record company's share; and C, the cost of producing the CD (which the record companies bears). At what quantity would the record company like to produce the CD?
A. 0
B. Q1
C. Q2
D. Q3
A flexible exchange rate is an exchange rate whose value:
A. reflects the comparative advantage of the home country versus other foreign countries. B. is established annually by the International Monetary Fund. C. varies according to supply and demand for the currency in the foreign exchange market. D. is determined by the law of one price.
Which set best describes the basic features of monopolistic competition?
A. Easy entry, few firms, and standardized products. B. Easy entry, many firms, and differentiated products. C. Barriers to entry, few firms, and differentiated products. D. Barriers to entry, many firms, and standardized products.
Which of the following is the largest contributor to the growth of labor productivity in the United States?
A. Technological advance. B. Education and training of labor. C. Economies of scale. D. Improved resource allocation.