Mechanism of Universal Adoption for a Dominating Technology
A new technology that is sufficiently advanced to 'dominate' existing methods—by producing the same output with fewer total inputs—will eventually be adopted globally, regardless of a country's initial technological specialization. For example, a superior energy-intensive technology (like A') would become the new least-cost option not only for countries already using a similar method (A) but also for those that had been using a different, labor-intensive method (B), thereby ensuring its widespread adoption.
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Ch.2 User-centered design process - User Experience Design - Winter 23 @ UI Design in UI @ University of Michigan - Ann Arbor
UI Design in UI @ University of Michigan - Ann Arbor
User Experience Design - Winter 23 @ UI Design in UI @ University of Michigan - Ann Arbor
UI @ University of Michigan - Ann Arbor
User Experience Design @ UI Design in UI @ University of Michigan - Ann Arbor
University of Michigan - Ann Arbor
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.2 Technology and incentives - The Economy 2.0 Microeconomics @ CORE Econ
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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
Learn After
Global Technology Adoption Scenario
Country A has very low labor costs and uses a labor-intensive method to manufacture widgets. Country B has very low energy costs and uses an energy-intensive method for the same task. A new manufacturing technology is developed that can produce one widget using less labor than Country A's method AND less energy than Country B's method. Assuming the goal is to produce at the lowest possible cost, which country is likely to adopt the new technology in the long run?
A new manufacturing process is developed that produces one car using 10% less labor but 5% more electricity than the most common existing method. This new process will eventually be adopted by all car-manufacturing nations because it is more technologically advanced.
Explaining Universal Technology Adoption
Comparing Global Adoption of New Technologies
Match each technological innovation scenario with its most likely long-term adoption outcome, based on its effect on production inputs.
An economist is tasked with addressing severe traffic congestion in a major city. Following the principle that one must first diagnose the core problem before prescribing a treatment, arrange the following actions into the most logical sequence.
For a new production method to be universally adopted, it must be a '____' technology, meaning it can produce the same amount of output using fewer of all relevant inputs compared to existing methods.
A new textile loom is invented. To produce one standard bolt of cloth, it requires 2 hours of labor and 5 kWh of electricity. It is intended to replace two existing methods: Method A (Labor-Intensive) uses 5 hours of labor and 3 kWh of electricity, while Method B (Energy-Intensive) uses 1 hour of labor and 10 kWh of electricity. Based on an analysis of the inputs required, what is the most likely long-term global adoption outcome for the new loom?
A firm manufactures a product using one of two established methods: Method X, which is capital-intensive (2 machine-hours, 8 labor-hours per unit), or Method Y, which is labor-intensive (1 machine-hour, 12 labor-hours per unit). The firm is evaluating four new potential processes. Which of the following new processes represents a 'dominating technology' that would be universally adopted in the long run, regardless of the relative costs of labor and capital?