3 Technological Progress Flashcards
How has the labour productivity of light changes in the past centuries?
How has the speed of information transfer changed in the past centuries?
Why did the Industrial Revolution happen first in 18th c., in Britain?
Many alternative explanations including:
- Relatively high cost of labour, along with cheap local sources of energy.
- Europe’s scientific revolution and Enlightenment
- Political characteristics of the nation(s)
- Cultural attributes: hard work, savings; (the ‘Protestant work ethic’)
- Access to colonies
Define technology
The process of converting inputs into outputs.
Equation for cost of producing energy from coal?
c = wL + pR
cost = (wage × labour hours) + (price of coal × quantity of coal)
Define isocost line
Combinations of inputs that give the same total cost.
How do we get the slope of the isocost line?
Equation for profit
Profit = revenue - costs
Profit and Schumpeter
Reduction in costs, associated with adoption of the new technology, gives higher profits: the (Schumpeterian) ‘innovation rent’.
Old technologies, and firms that do not adapt, cannot compete in the market and are swept away in a wave of ‘creative destruction’.
so actually why did britin start the industrial revolution?
English wages were higher than wages elsewhere, and coal (and capital) was cheaper than in other countries.
