Economics Assignment About Technology Essay

During the 1990s, technological advance reduced the appeal of computing machine chips. Explain, with the use show and demand diagrams, how the following commercialises are qualifying in terms of tolls and quantities.a)Computersb)Computer softwarec)Typewritersa) DEMAND- Demand refers to how much (quantity) of a merchandise or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain set the relationship among impairment and quantity demanded is cognise as the demand relationship as showed on the graph below. overdue to technological advance reducing the value of computer chips, at that place is a d holdward shift on the demand crape. As there is toll factor involved, there is a impetus in the curve. As the expense decreased, the total quantity demand change magnitude. Moreover due to reduce cost in computer chips, the selling price has also been reduced consequently rise in consumers purchasing to a gr eater extent computer chips.As the price is less than the equilibrium price there is an excess quantity demanded, which may course a shortage. SUPPLY- The quantity supplied refers to the amount of a certain correct producers are willing to leave when receiving a certain price. The correlation between price and how much of a good or service is supplied to the market is known as the supply relationship. In this grapheme, 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 people are willing and can reach to purchase the computer chip.b) Demand- A computer software falls chthonic 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 parapraxis is computer software 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 few 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 dissemble no changes to the price or the quantity of its products as price lessening on computer-chip has no direct relation to it. The ceteris paribus holds all prices of other 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 2 later on an economics lecture one day, your friend suggests that taxing nourishment would be a good path to raise revenue because the demand for forage is quite inelastic.a)In what sense is taxing food is a good elan to raise revenue? b)In what sense is it not a good way to raise revenue?a) Food is a need, it is essential to us. Taxing food is a good way to raise revenue because the percentage change in quantity demanded is smaller 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 centering coefficient is less than 1 and total revenue varies directly with the direction of the price change (as the price of food increases, total revenue also rises). pack will have to buy food to survive as some people live a busy life to grow their own crop.b) It is not a good way to raise revenue as people that live an average life or lower would support more. As it is they can barely put the food on the dinner party table for the family, raising revenue would cause them to struggle even more causing more crimes such(prenominal) as shop lifting. Healthy foods are much dearer than junk foods therefore people will start have take-away foods which would increase the rate of obesity. With take-way chains like Mc Donalds promoting cheaper it ems such as the loose change menu and also ad new food products regularly, take-way food would be the easier option.Question 3most studies of firms long run be have found that average costs 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 costs associated with large-scale operations. Why might this be the case? Explain.