Final answer:
If software becomes less expensive, firms will buy more software and less labor, such as programmers. Additionally, if a production input's price rises, firms will switch to cheaper alternatives, and skills training programs can affect labor market wages and inequality.
Step-by-step explanation:
When the price of software decreases, all else equal, firms will purchase more software and hire fewer programmers. This trend occurs because software and programmers can be considered as substitutes in production; when software becomes cheaper, firms can economize by using more software instead of hiring additional programmers.
In choosing a production technology, if one input becomes relatively more expensive, firms may react by substituting away from the more expensive input towards a less costly alternative.
For example, if the cost of machines increases, there might be a shift towards using more labor, as the firms aim for the production technology which entails the lowest total cost.
In labor market dynamics, a skills training program can cause shifts in supply. For low-wage labor markets, such a program may shift the supply curve to the left, resulting in higher wages for the remaining low-skill workers. Conversely, in the market for high-wage labor, an increased supply of high-skill workers can drive down wages due to the rightward shift in supply after the training. These shifts can reduce wage inequality.