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Micro Economics > TECHNOLOGICAL CHANGE > Flashcards

TECHNOLOGICAL CHANGE Flashcards

1
Q

what is technology

A

knowledge put to practical use to solve problems facing human societies

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2
Q

what is technological cahnge

A

overall effect of invention , innovation and the diffusion / spread of tech in an economy

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3
Q

what does technological change involve

A

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

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4
Q

what 3 things does tech lead to

A

developemnt of new mkts + products

changes in mkt structure

destruction of existing markets

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5
Q

whats does tech do to lrac

A

reduce tehm

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6
Q

a shift drop in LRAC represents

A

dyanimc efficiency

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7
Q

what is invention

A

creation of new idea without it necessarily becoming commercial reality

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8
Q

what is innovation

A

transforming an invention into commerical relaity

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9
Q

innovaiton can besmall scal ewhat does this mean

A

production process of a business improves

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10
Q

innovaiton cna be greter what does tis mean

A

new products are invented , new services inventeed

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11
Q

what is creative destructino

A

coming out w new g/s revolutionisning given market can destroy preexisting mkts and bs which destroys jobs

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12
Q

give me examples of innovaiont

A

uber destroying traditional taxi services

air bnb destroying tradiyional hote services

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13
Q

technological change can lead to what types of production processes

A

captial or labour intensive production processes

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14
Q

give me an example of innovaiton leading to a more cpital intensive production process

A

car production use of robots replace workers lead to more capital intensive production

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15
Q

give me example of how technologial change can lead to more labour intensivve production

A

medical services new tech advancements require use of labour to operate them e.g FMRI scans

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16
Q

what decides whether caital to labour ratios swing which way

A

type of industry

17
Q

generally economists argue about technological change

A

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

18
Q

explain 3 impact of technological cshnge on cop

A

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

19
Q

explain impact of technological change on EOS

A

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

20
Q

explain impact of technological change on efficient

A

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

21
Q

how can we argue whether tech change impacted maket structures

A

look at indi characteritics of diff mkts

22
Q

what are the 4 ways we break down mkt structures into

A

BTE/E

number of firms

product homogenity

knowledge

23
Q

what are our points for bte reduced

A

phsyical premises

workers

advertising

24
Q

explaint he phsyical premises point of BTE

A

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

25
Q

Explain the wokeres point of bte

A

If not employing as many workers as dont have physical premises might be easier to meet emplotmeynt law + lowe labour costs due to greater tech which is biggest cost for bs

26
Q

exaplin adv point of view BTE

A

Adv much easier to do with greater roel of internet which cna reduce brand loyalty aspect pf BTE so firms can use social media to adv + break into markets easier due to internet - reducing key bte = heavy adv of incumbent firms + brand loyayt

27
Q

IN SOME INDUSTRIES WHY DO BTE INCREASE

A

EOS / firms able to access greater copyright snd patent sby invenitng new tech restricting comp in certina industries

28
Q

BUT OVERALL BTE HAVE COME DOWN DUE TO THE USE OF INTERNE

Y/NO

A

Y

29
Q

NUMBER OF FIRMS IN A MKT DEPENDS V HEAVILY ON

A

BTE

30
Q

Explain number of firm depends on bte

A

if theyve been reduced more firms in the mkt and see more competitive mkts
But if bte increased less firms and more monopoly outcomes esp where copy right and patents e.g pharma industry

31
Q

explain product homegenity

A

much reater variety of products and services , so less simliayt michb more variety as things beocme invented

32
Q

explain how tech chane has improved knowledge

A

.g role of internet improves price info for consumers

But producers too being able to access new tech

If company comes up with brand new innovation of new tech other comp can take it and strip it down to coponetn parts ee it and copy these tech

So both have better knowledge of mkt conditions , prices , costs and tech in given mkt

33
Q

explain how knowledge has beocme more impeorfect

A

where patens licenses , copyrights and one firm got control over mkt

34
Q

whether mkts have become more competitive or concentrated depends on

A

industry and theri characteristics

35
Q

mkt have generally ebcome mcuh more

A

competitive and ocntestable

36
Q

how do we show tech change on a diagram

A

lrac

costs

output

shift lrac down and to teh right

reduce mes

put in q and prices

Micro Economics (57 decks)

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