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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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.
For firm A, is the following an internal or external economy of scale?
Firm A benefits from a pool of trained labour in the area.
Which of the following describes an increase in technological knowledge?
A farmer discovers that it is better to plant in the spring rather than in the fall.
A farmer sends his child to agricultural college and the child returns to work on the farm.
A farmer hires another day laborer.
A farmer buys a tractor.
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Principles of Economics (12th Edition)
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- 1) In connection with the Law of the Minimum and the Law of Diminishing Returns, describe how the production function model can be a helpful tool in managing an agricultural production system.arrow_forwardExplain why an increase in the price of an input must typically cause an increase in the long-run total cost of producing any particular level of output.arrow_forwardWould you please tell me how the economies of scale can spread out the cost of production, so that the average cost of each product is reduced?arrow_forward
- Identify 10 examples of direct factors (labor, capital, technology, resources) used for production and 10 examples of indirect factors (i.e factors other than labor, capital, technology, or resources).arrow_forwardIntroduction to Calculus in Economics (continued): In the previous Problem Set question, we started looking at the cost function C (æ), the cost of a firm producing z items. An important microeconomics concept is the marginal cost, defined in (non- mathematical introductory) economics as the cost of producing one additional item. If the current production level is æ items with cost C (z), then the cost of computing h additionial (C(z+h)-C(z)) items is C (z + h). The average cost of those h items is . As we analyze the cost of just the last item produced, this can be made into a mathematical model by taking the limit as h → 0, i.e. the derivative C' (z). Use this function in the model below for the Marginal Cost function MC (x). Problem Set question: The cost, in dollars, of producing z units of a certain item is given by C (z) = 0.02a3 – 10z + 450. (a) Find the marginal cost function. MC (z) (b) Find the marginal cost when 50 units of the item are produced. The marginal cost when 50…arrow_forwardProblem 1 - Macroeconomics - please help.arrow_forward
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