Writing in the New York Times on the Technology Boom

question 140

Multiple Choice

Writing in the New York Times on the technology boom of the late 1990s, Michael Lewis argues, "The sad truth, for investors, seems to be that most of the benefits of new technologies are passed right through to consumers free of charge." What does Lewis means by the benefits of new technology being "passed right through to consumers free of charge"?

• A)Firms in perfect competition are price takers. Since they cannot influence price, they cannot dictate who benefits from new technologies, even if the benefits of new technology are being "passed right through to consumers free of charge."
• B)In perfect competition, price equals marginal cost of production. In this sense, consumers receive the new technology "free of charge."
• C)In the long run, price equals the lowest possible average cost of production. In this sense, consumers receive the new technology "free of charge."
• D)In perfect competition, consumers place a value on the good equal to its marginal cost of production and since they are willing to pay the marginal valuation of the good, they are essentially receiving the new technology "free of charge."

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Definitions:

Late Eighteenth

Referring to the late 1700s, a period marked by significant historical events such as the American Revolution and the early stages of the Industrial Revolution.

Early Nineteenth

Pertaining to the period from 1801 to 1830, typically involving events and developments in the early 19th century.

Military Success

The achievement of strategic goals and objectives through the effective use of armed forces in combat or operations.

Reactive Power

The component of electrical power that oscillates between the source and load, stored temporarily in the circuit's inductance or capacitance.