Question

1- What does the term "technology" mean in Economics, and how does that notion differ from the notions of technology as used outside of Economics?

2- Explain why an improvement in the legal system can lead to higher GDP.

3- Write down the full definition of the demand curve. Also, give a one sentence statement about what the word "able" refers to in that definition.

Answer 1

TECHNOLOGY

1- The term technology is the study and transformation of techniques, tools,and machines created by humans .Technology allows humans to study and evolve the physical elements that are present in their lives .

-The simplest form of technology is the development and use of basic tools. Technology for economists, is anything that help us produce things faster,better or cheaper.

-Technology society and life or technology and culture refers to the inter- dependency, co- dependence, co influence and co - production of technology and society upom one another.

2- Things that could lead to a higher GDP but do not improve well being would be things such as Consumption, Government Purchases, or Net Exports.

-In the short term ,economic growth is caused by an increase in aggregate demand (AD) .If there is spare capacity in the economy, then an increase in AD will cause a higher level of real GDP.

-An Increase in GDP will raise the demand for money because people will need more money to make purchase the new GDP .In contract, a decrease in real GDP ( a recession) will cause a decrease in average interest rates in an economy.

3-The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time .In a typical representation, the price will appear on the left vertical acis , the quantity demanded on the horizontal axis .

-Example- It shows the quantity demanded of the good by all individuals at varying price points. For example, at $10 / latte, the quantity demanded by everyone in the market is 150 lattes per day .

-The market demand curve is typically graphed and downward sloping because as price increases, the quantity demanded decreases.

-The word able refers to the condition

For Example- If the price of corn rises consumers will have an incentive to buy less corn and substitute it for other foods,so the total quantity of corn consumers demand will fall.