) Consider a company that has two types of employees: people who take orders from customers...

) Consider a company that has two types of employees: people who take orders from customers (“order-takers”) and people who deliver the ordered products (“delivery people”). Suppose that the company obtains a new technology that allows it to use computers to automate many of the tasks that its order-takers are currently doing.

a. What effect would you expect this technology to have on the quantity of computers used by the company? Explain.

b. What effect would you expect this technology to have on the number of delivery people employed by the company? Explain.

c. What effect would you expect this technology to have on the number of order-takers employed by the company? Explain.

Expert Solution

a. The quantity of comuters used by this company would increase since the new technology requires the use of computers. The company will have to buy more computers to make use of this new technology since earlier the employees were doing most of the work, computers would not have been in use. However now the computers would be needed to automote most of the work.

b. This technology will not have any negative effect on the number of delivery people since this technology does not automates the work done by delivery guys . If the technology is implemented successfully then the company will need more delivery guys since computers will be more efficient than the human beings since it is a machine.

c. This technology will have a negative effect on the number of order takers employees and they will be reduced in number so the quantity of order takers will reduce as most of them will be laid off. Even though there will be a higher one time cost of buying the computers but the company will be better off with the computers in the long run as they will not have to pay wages or salaries to more workers and incur only the electricity costs for the computers and some maintainence costs. This is an example of structural unemployment.

Rahul Sunny answered 2 years ago

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