Consider two hypothetical 18th-century economies. In Economy A, wages for factory workers are very high, while the cost of coal for energy is very low. In Economy B, wages are very low, while the cost of coal is very high. An inventor proposes a new steam-powered machine that can do the work of ten workers but requires a large and continuous supply of coal. In which economy would a factory owner have the strongest economic incentive to adopt this new machine, and why?

Entrepreneurial Opportunity and Financial Barriers

Evaluating Competing Theories of Technological Adoption

Incentives for Technological Adoption

Evaluating 18th-Century Protectionist Measures

Analyzing Divergent Work-Leisure Outcomes

Incentives for Technological Innovation

Match each 18th-century economic scenario, defined by the relative costs of labor, energy, and capital, with the technological path it would most strongly incentivize.

The primary economic condition that spurred the invention of labor-saving machinery during the Industrial Revolution in Britain was the abundance of cheap labor, which allowed entrepreneurs to afford the large workforces needed to build and test new technologies.

The economic environment of 18th-century Britain was characterized by wages that were high relative to the cost of both energy (from coal) and capital (machinery). Which of the following outcomes was the most direct and logical consequence of this specific set of price signals for entrepreneurs?