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Chapter 11: Problem 1

What is the difference between technology and technological change?

Short Answer

Expert verified
Technology refers to the collection of methods, techniques, and devices at our disposal, while technological change is the process of developing new technologies and/or improving existing ones.

Step by step solution

01

Define Technology

Define the concept of 'technology'. Technology refers to the collection of techniques, skills, methods, and processes used in the production of goods or services, or in the accomplishment of objectives. It is a broad concept that encompasses various aspects such as procedures, equipment, knowledge and so forth.
02

Define Technological Change

Define the concept of 'technological change'. Technological change is the development of new technologies and/or the improvement of existing ones. It can be manifested in different ways: the creation of new products, improvement of production processes, or development of new ways to provide services.
03

Compare and Contrast

Compare and contrast the two concepts. From the definitions, it is clear that while technology refers to tools and techniques currently in use, technological change is about the process of improving these tools and techniques or coming up with entirely new ones.

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Most popular questions from this chapter

In describing the optimal size of an investment fund, a writer for the Wall Street Journal observed: … at first, bigger is better for both investors and managers…. Managing money is expensive. Small funds have many fixed costs…. If a fund is small, it can’t generate enough fees to cover costs…. The result is that in terms of performance, funds should want to get big to cover costs and maximize returns, but not so big that diseconomies of scale erode returns. Draw a graph of a long-run average cost curve for a typical firm in the investment fund industry. In your graph, draw and label the following. a. A short-run average total cost curve for an investment fund that has not reached minimum efficient scale b. A short-run average total cost curve for an investment fund that has reached minimum efficient scale c. A short-run average total cost curve for an investment fund that experiences diseconomies of scale d. A range of output within which investment funds experience constant returns to scale

At one point, Time Warner and the Walt Disney Company discussed merging their news operations. Time Warner owns Cable News Network (CNN), and Disney owns ABC News. After analyzing the situation, the companies decided that a combined news operation would have higher average costs than either CNN or \(\mathrm{ABC}\) News had separately. Use a long-run average cost curve graph to illustrate why the companies did not merge their news operations.

Is it possible for average total cost to be decreasing over a range of output where marginal cost is increasing? Briefly explain.

In his autobiography, T. Boone Pickens, a geologist, entrepreneur, and oil company executive, wrote: It's unusual to find a large corporation that's efficient.... When you get an inside look, it's easy to see how inefficient big business really is. Most corporate bureaucracies have more people than they have work. Was Pickens describing diminishing returns or diseconomies of scale? Briefly explain.

Draw a graph that shows the usual relationship between the marginal product of labor and the average product of labor. Why do the marginal product of labor and the average product of labor curves have the shapes you drew?
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