Learn Before
Innovation in Suit-Making Technology
An example of profitable technological adoption is the development of new suit-making methods. These innovations significantly decreased the labor hours and specialized skills needed compared to traditional tailoring. Because these new technologies were more profitable than the conventional approaches, they were widely adopted by firms.
0
1
Tags
Social Science
Empirical Science
Science
Economy
CORE Econ
Economics
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.2 Technology and incentives - The Economy 2.0 Microeconomics @ CORE Econ
Related
Innovation in Suit-Making Technology
Production Method Adjustment
A company manufactures furniture using 'Method A', which requires 10 hours of labor and 2 machine-hours to produce one table. A new 'Method B' is developed, which requires only 4 hours of labor but 5 machine-hours to produce the same table. Which of the following scenarios would provide the strongest economic incentive for the company to switch from Method A to Method B?
Incentives for Technological Adoption
A manufacturing firm will always choose to adopt a new production technique if it reduces the number of workers required to produce a specific quantity of goods, regardless of any other changes in resource requirements.
A firm produces 100 widgets and is currently using 'Technology A'. The firm is considering four different production technologies, each with different requirements for labor and capital, as shown in the table below. Initially, the wage for a worker is $10, and the rental cost of capital is $40. Suddenly, the wage for a worker increases to $30, while the cost of capital remains unchanged. Based on this change, what is the most profitable action for the firm to take?
Technology Number of Workers Units of Capital A 10 2 B 6 3 C 4 7 D 2 10 Evaluating the Adoption of a New Production Process
A manager of a textile factory, which currently uses a set of standard looms, learns about a new, highly automated loom. This new loom requires fewer workers to operate but consumes more electricity per meter of cloth produced. Arrange the following steps in the logical order a profit-maximizing manager would follow to decide whether to adopt the new technology.
Match each change in the relative cost of production inputs with the type of technological innovation it would most likely incentivize a firm to adopt.
A textile mill produces 500 meters of fabric per day using a process that requires 8 workers and 3 machines. A new process is introduced that can produce the same amount of fabric with only 4 workers but requires 7 machines. If the daily wage per worker is $100 and the daily cost per machine is $50, adopting this new labor-saving process would result in a daily cost saving of $____.
Bakery's Response to Rising Labor Costs
Learn After
Illustrating New Suit-Making Technology's Impact on Labor Inputs
A company that produces suits is evaluating two different production technologies. To make a single suit, the costs are as follows:
- Technology X (Traditional): Requires 15 hours of labor at a cost of $40 per hour, and uses equipment that costs $100 per suit.
- Technology Y (New): Requires 5 hours of labor at a cost of $40 per hour, and uses a new machine that costs $350 per suit.
Assuming the final quality and selling price of the suit are identical regardless of the technology used, which technology would a profit-maximizing firm choose, and what is the primary reason for this choice?
Evaluating a Firm's Technological Adoption Strategy
Economic Rationale for Technological Adoption in Suit Manufacturing
A new suit-making technology is introduced that reduces the required labor hours per suit by 50% but requires a more expensive machine. A profit-maximizing firm will always choose to adopt this new technology.
Profitability and Technological Change in Suit Manufacturing
A suit-making company is deciding whether to switch from its traditional production method to a new, more technologically advanced one. Match each economic scenario with the most likely decision for a profit-maximizing firm.
A firm that manufactures suits is considering whether to adopt a new production technology that promises to reduce labor costs but requires more expensive machinery. Arrange the following steps into the logical sequence a profit-maximizing firm would follow to make this decision.
A company will adopt a new suit-making technology that requires more expensive machinery only if the resulting decrease in ______ costs per suit is significant enough to make the new method more profitable overall.
Evaluating a Firm's Technological Adoption Strategy
A new manufacturing technique for suits is developed that reduces the required labor hours per suit by half, but the necessary machinery is significantly more expensive than the equipment used in the traditional method. Under which of the following economic conditions would a profit-maximizing firm be LEAST likely to adopt this new, labor-saving technique?