Using two graphs, illustrate how a positive technological change in the market for notebook computers could eliminate short-run economic profit for a firm in that market. On the first graph, use a supply and demand graph to illustrate the positive
technological change. On the second graph, use demand, ATC, MC, and MR curves to illustrate the elimination of economic profit resulting from the positive technological change. Explain what is taking place in each graph.
What will be an ideal response?
On the first graph, supply shifts to the right as a result of the positive technological change, lowering the equilibrium price and increasing the equilibrium quantity. On the second graph, the lower price shifts the demand curve down to where it intersects the ATC curve at its minimum point, eliminating economic profit.
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The Monetary Control Act of 1980 :
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
The rate of economic growth will be faster if
A) the rate of growth of the population is higher. B) consumption spending is greater. C) the rate of saving is higher. D) the rate of growth of the money supply is higher.
Out-of-pocket expenses such as wages and raw materials are
A) direct costs. B) an owner-provided capital cost. C) implicit costs. D) explicit costs.