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Chapter 11: Problem 4

Which of the following are examples of a firm experiencing positive technological change? a. A fall in the wages JetBlue pays its mechanics leads it to lower its ticket prices. b. A training program makes a firm's workers more productive. c. An exercise program makes a firm's workers healthier and reduces the number of days the typical worker is absent. d. A firm cuts its workforce and is able to maintain its initial level of output. e. A firm rearranges the layout of its factory and finds that by using its initial set of inputs, it can produce exactly as much as before.

Short Answer

Expert verified
The examples of a firm experiencing positive technological change are b) A training program makes a firm's workers more productive, c) An exercise program makes a firm's workers healthier and reduces the number of days the typical worker is absent, and d) A firm cuts its workforce and is able to maintain its initial level of output.

Step by step solution

01

Analyze each variation

This step involves carefully reading each scenario and determining whether it involves a change in the level of output produced by the firm or if the firm is able to increase its production with the same level of inputs.
02

Identify Positive Technological Changes

Positive technological change represents scenarios where this change causes the firm to improve its ability to produce more output with the same level of input. It is pertinent to identify these scenarios from the given options.
03

Confirm the Positive Technological Changes

In this final step, you confirm the scenarios that were identified as showcasing positive technological change in step 2. You need to ensure that these scenarios meet the definition of positive technological change i.e., an improvement in the firm's ability to produce more output using the same level of inputs.

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