UNIT 2 assignment UCL PDF

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Unit 2 assignment econ0002. technology, population and growth...

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UNIT 2 Exercise 2.3 Isocost Lines: 1. Relative price of labour is -2. So, if the employer wants to hire another person then they will need to purchase 2 less tonnes of coal so that the total costs stay the same. 2. Equation for isocost line: 60=10L+5R R=12-2L 3. If C=30, 30=10L+5R 5R=30-10L R=6-2L If C=90, 90=10L+5R 5R=90-10L R=18-2L When w=10 and p=20 R=4-0.5L This set of isocost lines are a lot steeper than when w=10 and p=20

(purple line)

Exercise 2.4 Britain but not France: 1. Women began to get paid more due to the growing textile industry, so machines such as the spinning jenny became very popular and profitable. Capital intensive technologies

were used more in 18th century than the 17th century and they were invented because labour costs were higher than energy costs. This rise in labour costs may have been due to successful imperialism in Britain. This only happened in Britain as the textile industry hadn’t grown as much in other countries. Assumptions made: the quality of products produced, the speed of production and capital costs involved in switching between labour intensive and energy intensive technologies are all the same. 2. Other important factors that explain the rise of energyintensive technologies: the fall in prices of coal in Britain, as that makes it cheaper to use methods that require more energy from coal than human energy since labour costs were rising. Also, the rate of wages rising in Britain were greater than most other countries, this made fuel-using technologies more profitable. Differences in government ideologies in other countries may have inhibited their economic growth....