Answered: One of the largest changes in the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

One of the largest changes in the economy
o ver the past several decades is that technological
advances have reduced the cost of making
computers.
a. Draw a supply-and-<lcmand diagram to show
what happened to price_, quantity, consumer
surplus, and producer surplus in the market for
computers.
b. forty years ago, students used typewriters to
prepare papers for their classes; today they
usc computers. Docs that make computers and
typewriters complements or substitutes? Usc
a supply-and--demand diagram to show what
happened to p rice, 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. Arc 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. Docs this analysis help explain why software
producer Bill Gates is one of the world's richest
people?

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