Economics Assignment About Technology Essay

During the 1990s, technological acclivity cut the equal of estimator chips. Explain, with the use supply and take on diagrams, how the following marts be affected in terms of values and quantities.a)Com regularizeersb)Computer softwargonc) grammatical casewritersa) DEMAND- Demand refers to how oftentimes (quantity) of a product or improvement is desired by buyers. The quantity contained is the append of a product lot are willing to buy at a certain determine the relationship among toll and quantity enquireed is kn declare as the pick out relationship as showed on the graph below. Due to technological advance reducing the terms of computer chips, thither is a downward shift on the demand hoist. As on that point is footing factor involved, in that location is a exertion in the curve. As the wrong decreased, the total quantity demand change magnitude. Moreover referable to reduce cost in computer chips, the selling price has also been reduced therefore ris e in consumers acquire more(prenominal) computer chips.As the price is less than the equilibrium price there is an excess quantity demanded, which may play a shortage. SUPPLY- The quantity supplied refers to the amount of a certain correct producers are willing to supply when receiving a certain price. The correlation between price and how much of a dependable or service is supplied to the market is known as the supply relationship. In this suit, movement to the right of the supply curve as the supply has also increased due to the decrease in cost of computer chips. As the selling price has decreased, the supply has increased because more mountain are willing and can brook to purchase the computer chip.b) Demand- A computer software falls under a complementary good as its jointly consumed with computer chips. As a result, there is an inverse relationship between price changes for computer chips therefore the demand for its complementary good which in this case is computer s oftware will decrease. If the price of computer software increased there would be upward shift on the demand curve therefore lesser quantity demanded as there are fewer people purchasing the product. Supply- as there was an increase in the price, there was a decrease in the supply.c) Type writers in this case would make no changes to the price or the quantity of its products as price reduction on computer-chip has no direct relation to it. The ceteris paribus holds all prices of otherwise goods constant. Therefore, movement along a demand curve only occurs solely in response to changes in the price of computer-chips that is, its own price.Question 2After an political economy lecture one day, your friend suggests that impose solid aliment would be a good path to demonstrate tax income because the demand for fare is quite inelastic.a)In what sense is onerous forage is a good way to raise revenue? b)In what sense is it not a good way to raise revenue?a) Food is a need, it is i nborn to us. Taxing food is a good way to raise revenue because the per centimeage change in quantity demanded is small than the percentage change in price (1 per cent in quantity demanded in response to a 1 per cent change in price). The demand for food is inelastic because the elasticity coefficient is less than 1 and total revenue varies directly with the forethought of the price change (as the price of food increases, total revenue also rises). spate will have to buy food to survive as most people live a busy livelihood to grow their own crop.b) It is not a good way to raise revenue as people that live an clean life or lower would stomach more. As it is they can barely put the food on the dinner put over for the family, raising revenue would cause them to battle even more causing more crimes such(prenominal) as shop lifting. rubicund foods are much dearer than junk foods therefore people will start take in take-away foods which would increase the rate of obesity. With take-way imprisonment like Mc Donalds promoting cheaper items such as the loose change posting and also advertising new food products regularly, take-way food would be the easier option.Question 3Most studies of firms long run be have found that average cost decline as firms produce increasingly larger output levels (economies of scale), such as for automobile firms. However, trucking (haulage) firms appear not to experience falling average be associated with large-scale operations. Why might this be the case? Explain.