If Technological Advances Lower the Cost of Computer Chips, in the Market

question 43

Multiple Choice

If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will __________and the equilibrium quantity will __________.

• A) fall; decrease
• B) rise; decrease
• C) rise; increase
• D) fall; increase

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Definitions:

Economic Theory

A set of principles and methodologies that explain how economies function, covering topics from microeconomics to macroeconomics.

Economic Systems

The organized way a society allocates its resources and distributes goods and services among its population.

Recession

A short-term economic slump characterized by a reduction in business and industrial activities, usually signified by a GDP decrease over two back-to-back quarters.

Real GDP

Gross Domestic Product adjusted for inflation, providing a more accurate representation of an economy's size and how it's growing over time.