ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Answer and Explanation: 1. False. Technology is another factor of production apart from capital and labor that changes the total output of the economy.

Detailed explanation-2: -A change in technology alters the combination of inputs required in the production process. An improvement in technology usually means that fewer and/or less costly inputs are needed. If the cost of production is lower, the profits available at a given price will increase, and producers will produce more.

Detailed explanation-3: -Improved productivity and efficiency due to technological change, have a positive effect on the cost of production. More productivity means more output per input and more efficiency means that the output is achieved with less cost of production. Hence, the overall cost of production decreases.

Detailed explanation-4: -Technological advances that improve production efficiency will shift a supply curve to the right. The cost of production goes down, and consumers will demand more of the product at lower prices. Computers, televisions and photographic equipment are good examples of the effects of technology on a supply curve.

Detailed explanation-5: -Productivity is a measure of economic performance that compares the amount of goods and services produced (output) with the amount of inputs used to produce those goods and services.