TECHNOLOGICAL CHANGE Flashcards
what is technology
knowledge put to practical use to solve problems facing human societies
what is technological cahnge
overall effect of invention , innovation and the diffusion / spread of tech in an economy
what does technological change involve
improving existing tech
development of completley new tech
to improve
ecisting products and processes invovled in making products
and develop completely new products and processes
what 3 things does tech lead to
developemnt of new mkts + products
changes in mkt structure
destruction of existing markets
whats does tech do to lrac
reduce tehm
a shift drop in LRAC represents
dyanimc efficiency
what is invention
creation of new idea without it necessarily becoming commercial reality
what is innovation
transforming an invention into commerical relaity
innovaiton can besmall scal ewhat does this mean
production process of a business improves
innovaiton cna be greter what does tis mean
new products are invented , new services inventeed
what is creative destructino
coming out w new g/s revolutionisning given market can destroy preexisting mkts and bs which destroys jobs
give me examples of innovaiont
uber destroying traditional taxi services
air bnb destroying tradiyional hote services
technological change can lead to what types of production processes
captial or labour intensive production processes
give me an example of innovaiton leading to a more cpital intensive production process
car production use of robots replace workers lead to more capital intensive production
give me example of how technologial change can lead to more labour intensivve production
medical services new tech advancements require use of labour to operate them e.g FMRI scans
what decides whether caital to labour ratios swing which way
type of industry
generally economists argue about technological change
increased jobs as opposed to destroy jobs - but over next 50 yrs this not the case , capital cna replace labour
destruciton of jobs as tech imporves
explain 3 impact of technological cshnge on cop
Tech can reduce COP - so supply curve in indi mkt will shift to the right
For bs tech change reduce COP overtime meaning LRAC decrease - more precislyey - with better tech in industries , specialist capital and machinery can be brought in achieving tech econ of scale
Tech allows for specilsiation and dividson of labour as prod processes can be broken down int lines increasing prod and efficiency - whihc is again tech eos
explain impact of technological change on EOS
MES of production can take place at greater lvl of output as greater explotaations of EOS posible with improvements in tech
so we see reduction in COP but also increase in Q as MES takes place at greater level of quantity signifying THERE ARE more Eos EXPLOIT WITHs greater tec
explain impact of technological change on efficient
productive efficiency can increase as COP lower and MES at greater level of output
Allocatve efficiency depends on whether lower costs of productive efficiency passed on to consumers via lower prices
Dynaimc efficiency expected as tech imporvemetns lead to innovation new g/s which is good for consumers so tech change promotes dyno eff over time
how can we argue whether tech change impacted maket structures
look at indi characteritics of diff mkts
what are the 4 ways we break down mkt structures into
BTE/E
number of firms
product homogenity
knowledge
what are our points for bte reduced
phsyical premises
workers
advertising
explaint he phsyical premises point of BTE
if we look at tech change in terms of greater role of internet , barriers to entry sig come down in many industries e.g less need for physical premises as have ecom - w/o having to do this start up costs and sunk cost decrease which are 2 major BTE that have massively come down .
+ if no premises much easier to meet regs and legislation gov can enact
