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Refer to Figure 12.2. A technological advance causes the supply of personal computers to increase. The graph of this situation represents a
A) general equilibrium analysis because it identifies what happens to both equilibrium price and quantity of personal computers.
B) partial equilibrium analysis because it considers only this one industry.
C) firm-specific analysis because only one firm would be affected by the technological advance.
D) technological analysis because the change resulted from a technological advance.
Partial Equilibrium
A concept in economic analysis that examines the equilibrium condition in a single market or sector without considering interactions with other markets or sectors.
Technological Advance
The improvement or development of new methods, devices, or materials that increase efficiency and productivity.
Personal Computers
Electronic devices designed for individual use, capable of executing a wide range of applications, including word processing, internet browsing, and gaming.
- Recognize the effects of technological advances on industry supply and equilibrium.
- Describe the process and outcomes of general and partial equilibrium analysis.
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Learning Objectives
- Recognize the effects of technological advances on industry supply and equilibrium.
- Describe the process and outcomes of general and partial equilibrium analysis.
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