Question

11. assume that robots are capital goods. on your graph, show the long-term effect of a technological improvement that increases the production of robots. explain. 12. assume the economy of econland intentionally decides to produce combination d rather than combination b. what is the short term result and long-run trade

Answer 1

Improvements in technology can increase the production of robots in the long run, leading to economic growth and no longer facing diminishing marginal returns. In the short term, there is an increase in robot production, and in the long run, there is sustained economic growth and higher output levels.

Step-by-step explanation:

In the long run, improvements in technology can lead to an increase in the production of robots. This is because improved technology allows for more output to be produced with a given set of inputs. As a result, the production function shifts upward, showing that more robots can be produced at each level of capital deepening. This leads to increased economic growth and no longer faces diminishing marginal returns.

Short-term result: In the short term, there will be an increase in the production of robots due to the technological improvement. This means that more robots can be produced with the same amount of resources, leading to an increase in output.

Long-run trade: In the long run, the economy will benefit from the technological improvement as it allows for sustained economic growth. With improvements in technology, there is no longer any reason that economic growth must slow down. This leads to increased productivity and higher output levels in the long run.