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:

Structural RNA

RNA molecules that are not translated into protein but form an integral part of cellular structures like ribosomes.

Ribosomes

Cellular organelles that serve as the site of protein synthesis, reading mRNA and linking amino acids together.

Interphase

The phase of the cell cycle during which a cell grows, duplicates its DNA, and prepares for division.

Centrioles

Cylindrical structures in animal cells that play a key role in cell division.