Several Producers in Industry a Developed an Improved Technology That

question 118

Multiple Choice

Several producers in industry A developed an improved technology that reduces the quantity of resources used to produce a given output. Which of the following would be expected?

• A) The per-unit costs of production of the firms adopting the technology would increase.
• B) In the short run, economic profits would be earned by the earliest firms adopting the technology.
• C) Product price would immediately fall to the minimum average total cost of the firms quickly adopting the technology, thus retarding the rate at which firms enter the industry.
• D) Producers who adopt the technology will have short-run economic losses.

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Definitions:

Social Exchange Model

A psychological theory that attempts to explain human relationships in terms of cost-benefit analyses, where the benefits of a relationship must outweigh the costs for it to be considered worthwhile.

Economic Perspective

Viewing situations and making decisions based on costs, benefits, and impact on resources.

Self-Interest

The pursuit of personal advantage and well-being with little or no regard for others.

Matching Phenomenon

The idea that people seek romantic relationships with others who are similar to them in physical attractiveness.