Moore's law states that every 18 months, the computing speed of a microchip doubles. a. What effect does this likely have on the economy?

1. The price level falls and output rises.
2. The price level falls and output falls.
3. The price level rises and output rises.
4. The price level rises and output falls.

b. Demonstrate your answer graphically using the AS/AD model. Use the tool provided 'SAS/' to draw the new short-run aggregate supply curve.

The price level falls and output rises.

Explanation:

According to Moore's law, it is stated that the computing speed of a microchip doubles every 18 months. According to Moore, this will increase thespeed and capability of computers and also bring about lesser pay for the computers.

The effect of this on the economy is that it will lead to a fall in price level and increase in output as there will be faster and cheaper production. This can be shown in the diagram attached.

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"we first find value of tax in dollars.

the difference between the two prices   is: 23. 54 - 22 = 1.54

therefore the sales tax in dollars is 1.54

the tax % will be   (amount of tax / original cost price ) × 100

(1.54 / 22) × 100  → (0.07) × 100 =   7

so the tax rate is 7%

we can double check the answer.

7 % of 22   → (7/100) × 22 → 0.07 × 22 = 1.54

22 + 1.54 = 23.54"

answer; someone must cover the cost associated with the provision of scarce goods in both sectors;