When a new personal computer is purchased to replace an old one,and the new PC is much better and faster than the old one,there has been

Question

Quizplus · Accepted Answer

The replacement of the old PC with a newer, faster one is an example of an embodied technical change, where new, improved technology has been incorporated into a capital asset. This leads to an increase in output per unit of capital, rather than a decrease as in option C. Option A is incorrect because disembodied technical change refers to a situation where new technology is not directly incorporated into capital assets but rather involves changes in management or production processes. Option B is incorrect because it refers to a situation where there is an increase in the amount of capital relative to output, which is not the case in this scenario. Option E is also incorrect because capital deepening refers to an increase in the amount of capital per worker, not a replacement of old capital with new, improved capital.

When a New Personal Computer Is Purchased to Replace an Old