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Questions and Answers
In economics, what is the best definition of technology?
In economics, what is the best definition of technology?
The process a firm uses to turn inputs into outputs
What is technological change?
What is technological change?
A change in the ability of a firm to produce a given level of output with a given quantity of inputs
What is the difference between technology and technological change?
What is the difference between technology and technological change?
Technology is the process of using inputs to make output, while technological change is when a firm is able to produce more output using the same inputs
Is it possible for technological change to be negative?
Is it possible for technological change to be negative?
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Study Notes
Definition of Technology in Economics
- Technology refers to the procedures and methods implemented by a firm to convert inputs (resources) into outputs (goods or services).
Understanding Technological Change
- Technological change represents a shift in a firm's capability to produce a specified level of output using a specific quantity of inputs.
- This change can result in improved efficiency or increased production without additional resource investment.
Distinction Between Technology and Technological Change
- Technology encompasses the established processes for transforming inputs into outputs.
- Technological change signifies enhancements in productivity, allowing firms to achieve greater outputs with the same input levels.
Negative Technological Change
- Technological change can be detrimental, exemplified by instances such as natural disasters damaging company infrastructure (e.g., hurricanes).
- Hiring less-skilled workers can also lead to negative technological change by reducing efficiency and output quality.
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