The technological change.

Question

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Answer 1

Question

Chapter 3, Problem 1TC

To determine

The technological change.

Expert Solution & Answer

Explanation of Solution

Technological change will reduce the production costs for smart shirts shifting its supply curve to the right showing the increase in supply but the demand curve remains the same. The increasing supply leads to reduce the price and that in turn increases the quantity demand for smart shirts.

Thus, there is a movement along the existing demand curve because smart shirts and smart watches are complements, and a lower price for smart shirts will equally increase the demand for smart watches. The demand curve for smart watches will shift to the right, resulting in an increase in the equilibrium quantity and an increase in the equilibrium price.

Economics Concept Introduction

Concept introduction:

Technological change: They are the changes in the new and better ways for producing goods and services and distributing the same which will make the production more efficient.

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Short Description Fiscal Policy Graph Details Shown is a Fiscal Policy diagram with the variable Real GDP (billions of dollars) on the x-axis and the variable Price Level on the y-axis. The x-axis is scaled from 0 to 800 billion dollars with an increment of 40 billion dollars, and the y-axis is scaled from 30 to 150 units with an increment of 5 units. Object Details On the graph we have:Four Line Objects:An upward sloping Aggregate Supply, AS line with two endpoints:Point 1 at (160, 70)Point 2 at (720, 140)A downward sloping Aggregate Demand, AD1 line with two endpoints:Point 1 at (80, 110)Point 2 at (640, 40)A vertical Long-run Aggregate Supply, LRAS with two endpoints:Point 1 at (400, 145)Point 2 at (400, 30)A downward sloping Aggregate Demand, AD line with two endpoints:Point 1 at (720, 60)Point 2 at (160, 130)Two Reference Points:Lines AS, AD, and LRAS intersect at (400, 100)Lines AS and AD1 intersect at (280, 85) a. How much does aggregate demand need to change to restore the…

Fiscal Policy Graph Details Shown is a Fiscal Policy diagram with the variable Real GDP (billions of dollars) on the x-axis and the variable Price Level on the y-axis. The x-axis is scaled from 0 to 1000 billion dollars with an increment of 50 billion dollars, and the y-axis is scaled from 0 to 180 units with an increment of 10 units. Object Details On the graph we have:Four Line Objects:An upward sloping Aggregate Supply, AS line with two endpoints:Point 1 at (200, 40)Point 2 at (800, 160)A downward sloping Aggregate Demand, AD line with two endpoints:Point 1 at (200, 160)Point 2 at (800, 40)A downward sloping Aggregate Demand, AD1 line with two endpoints:Point 1 at (350, 170)Point 2 at (900, 60)A vertical Long-run Aggregate Supply, LRAS line with two endpoints:Point 1 at (500, 170)Point 2 at (500, 0)Two Reference Points:Lines AS and AD1 intersect at (600, 120)Lines AS, AD, and LRAS intersect at (500, 100) a. How much does aggregate demand need to change to restore the…

a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $ billion b. If the MPC is 0.6, how much does government purchases need to change to shift aggregate demand by the amount you found in part a? $ billion Suppose instead that the MPC is 0.95. c. How much does aggregate demand and government purchases need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ billion and government purchases need to change by $ billion.

Answer 2

Question

Chapter 3, Problem 1TC

To determine

The technological change.

Expert Solution & Answer

Explanation of Solution

Technological change will reduce the production costs for smart shirts shifting its supply curve to the right showing the increase in supply but the demand curve remains the same. The increasing supply leads to reduce the price and that in turn increases the quantity demand for smart shirts.

Thus, there is a movement along the existing demand curve because smart shirts and smart watches are complements, and a lower price for smart shirts will equally increase the demand for smart watches. The demand curve for smart watches will shift to the right, resulting in an increase in the equilibrium quantity and an increase in the equilibrium price.

Economics Concept Introduction

Concept introduction:

Technological change: They are the changes in the new and better ways for producing goods and services and distributing the same which will make the production more efficient.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 3, Problem 1TC

To determine

The technological change.

Expert Solution & Answer

Explanation of Solution

Technological change will reduce the production costs for smart shirts shifting its supply curve to the right showing the increase in supply but the demand curve remains the same. The increasing supply leads to reduce the price and that in turn increases the quantity demand for smart shirts.

Thus, there is a movement along the existing demand curve because smart shirts and smart watches are complements, and a lower price for smart shirts will equally increase the demand for smart watches. The demand curve for smart watches will shift to the right, resulting in an increase in the equilibrium quantity and an increase in the equilibrium price.

Economics Concept Introduction

Concept introduction:

Technological change: They are the changes in the new and better ways for producing goods and services and distributing the same which will make the production more efficient.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 3, Problem 1TC

To determine

The technological change.

Expert Solution & Answer

Explanation of Solution

Technological change will reduce the production costs for smart shirts shifting its supply curve to the right showing the increase in supply but the demand curve remains the same. The increasing supply leads to reduce the price and that in turn increases the quantity demand for smart shirts.

Thus, there is a movement along the existing demand curve because smart shirts and smart watches are complements, and a lower price for smart shirts will equally increase the demand for smart watches. The demand curve for smart watches will shift to the right, resulting in an increase in the equilibrium quantity and an increase in the equilibrium price.

Economics Concept Introduction

Concept introduction:

Technological change: They are the changes in the new and better ways for producing goods and services and distributing the same which will make the production more efficient.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 3, Problem 1TC

To determine

The technological change.

Expert Solution & Answer

Explanation of Solution

Technological change will reduce the production costs for smart shirts shifting its supply curve to the right showing the increase in supply but the demand curve remains the same. The increasing supply leads to reduce the price and that in turn increases the quantity demand for smart shirts.

Thus, there is a movement along the existing demand curve because smart shirts and smart watches are complements, and a lower price for smart shirts will equally increase the demand for smart watches. The demand curve for smart watches will shift to the right, resulting in an increase in the equilibrium quantity and an increase in the equilibrium price.

Economics Concept Introduction

Concept introduction:

Technological change: They are the changes in the new and better ways for producing goods and services and distributing the same which will make the production more efficient.

Answer 6

Chapter 3, Problem 1TC

To determine

The technological change.

Expert Solution & Answer

Explanation of Solution

Technological change will reduce the production costs for smart shirts shifting its supply curve to the right showing the increase in supply but the demand curve remains the same. The increasing supply leads to reduce the price and that in turn increases the quantity demand for smart shirts.

Thus, there is a movement along the existing demand curve because smart shirts and smart watches are complements, and a lower price for smart shirts will equally increase the demand for smart watches. The demand curve for smart watches will shift to the right, resulting in an increase in the equilibrium quantity and an increase in the equilibrium price.

Economics Concept Introduction

Concept introduction:

Technological change: They are the changes in the new and better ways for producing goods and services and distributing the same which will make the production more efficient.

Answer 7

Chapter 3, Problem 1TC

To determine

The technological change.

Answer 8

Expert Solution & Answer

Explanation of Solution

Technological change will reduce the production costs for smart shirts shifting its supply curve to the right showing the increase in supply but the demand curve remains the same. The increasing supply leads to reduce the price and that in turn increases the quantity demand for smart shirts.

Thus, there is a movement along the existing demand curve because smart shirts and smart watches are complements, and a lower price for smart shirts will equally increase the demand for smart watches. The demand curve for smart watches will shift to the right, resulting in an increase in the equilibrium quantity and an increase in the equilibrium price.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Concept introduction:

Technological change: They are the changes in the new and better ways for producing goods and services and distributing the same which will make the production more efficient.

Answer 12

Ch. 3 - Prob. 1TC Ch. 3 - Prob. 2TC Ch. 3 - Prob. 3.1.1RQ Ch. 3 - Prob. 3.1.2RQ Ch. 3 - Prob. 3.1.3RQ Ch. 3 - Prob. 3.1.4RQ Ch. 3 - Prob. 3.1.5RQ Ch. 3 - Prob. 3.1.6PA Ch. 3 - Prob. 3.1.7PA Ch. 3 - Prob. 3.1.8PA

The technological change.

The technological change.

Explanation of Solution

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