Dominating Technology

Diagram of a Technological Improvement: Technologies A, B, and A-prime

Initially, two main methods exist for producing a specific good. Method A, used where labor is expensive and fuel is cheap, requires 2 workers and 8 tons of fuel. Method B, used where labor is cheap and fuel is expensive, requires 10 workers and 3 tons of fuel. Later, a new technology, Method C, is invented. Method C requires only 2 workers and 2 tons of fuel to produce the same good. Based on this information, what is the most likely outcome of Method C's invention?

Evaluating a Technological Adoption Strategy

Explaining Patterns of Technological Diffusion

A new, highly efficient manufacturing technology is developed. If this technology is adopted in a country with high labor costs and low energy costs, it is unlikely to also be adopted in a country with low labor costs and high energy costs because the economic incentives for innovation are fundamentally different.

Technology Adoption and Input Costs

Imagine three distinct technologies are available over time to produce 100 meters of cloth. Match each economic scenario with the technology that a firm would most likely adopt to maximize profit.

Arrange the following statements in the correct logical sequence to describe the process by which an industrial technology, originally suited to one country's specific economy, becomes adopted globally.

The Global Spread of Weaving Technology

In the 19th century, a textile factory in a country with high labor costs and low energy costs (Country H) used a machine that required 2 workers and 10 units of fuel to produce a standard batch of cloth. A factory in a country with low labor costs and high energy costs (Country L) used a different process requiring 8 workers and 3 units of fuel for the same output. Decades later, a new machine was invented that required only 1 worker and 2 units of fuel. Why would the factory in Country L, despite its access to cheap labor, likely adopt this new, highly labor-saving machine?

Threshold for Global Technology Adoption

Mechanism of Universal Adoption for a Dominating Technology