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SCARCITY: A pervasive condition of human existence that exists because society has unlimited wants and needs, but limited resources used for their satisfaction. In other words, while we all want a bunch of stuff, we can't have everything that we want. In slightly different words, this scarcity problem means: (1) that there's never enough resources to produce everything that everyone would like produced; (2) that some people will have to do without some of the stuff that they want or need; (3) that doing one thing, producing one good, performing one activity, forces society to give up something else; and (4) that the same resources can not be used to produce two different goods at the same time. We live in a big, bad world of scarcity. This big, bad world of scarcity is what the study of economics is all about. That's why we usually subtitle scarcity: THE ECONOMIC PROBLEM.
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                           PRODUCTION TECHNOLOGY, SUPPLY DETERMINANT: The knowledge and information that suppliers have about production (that is, production techniques or the way inputs are combined to produce outputs) which are assumed constant when a supply curve is constructed. Production technology is one of five supply determinants that shift the supply curve when they change. The other four are resource prices, other prices, sellers' expectations, and number of sellers. The information available concerning production techniques affects the ability to supply a good. Technology is what producers know about the ways to combine inputs into the production of outputs. An advance in technology makes it possible to sell more of a good. A decline in technology means producers can sell less of a good. Doing More with LessProduction technology affects the manner in which resource inputs are combined to produce outputs. An advance in technology means that a given amount of resources can be used to produce more goods, or that the same amount of production can be obtained with fewer resources.While a decline in technology is theoretically possible, advances are more prevalent and a great deal more likely. A decline in technology means that a given amount of resources can be used to produce fewer goods, or that the same amount of production can be obtained with more resources. Consider the production and supply of Wacky Willy Stuffed Amigos to illustrate an advance in technology. When William J. Wackowski founded of The Wacky Willy Company, he did so with limited technology. His sewing machines were manually operated. Workers cut patterns with simple scissors. The button eyes were attached to each stuffed creature with a needle and thread. The Stuffed Amigos were stuffed by hand. Using this limited technology, each Wacky Willy worker was able to fabricate five Stuffed Amigos per day. The Wacky Willy Company now uses more advanced production technology. The entire process is automated and computerized, from pattern cutting to sewing to stuffing. This advanced technology allows each Wacky Willy worker to produce five hundred Stuffed Amigos per day. An increase in production technology has made it possible for each Wacky Willy worker to produce more output. As a general rule, technological advances make it possible to produce more output with fewer inputs and with a reduction in production cost. Shifting the Supply CurveProduction Technology |  | A change in production technology causes the supply curve to shift. This can be illustrated using the positively-sloped supply curve for Wacky Willy Stuffed Amigos presented in this exhibit. This supply curve captures the specific one-to-one, law of supply relation between supply price and quantity supplied. Production technology is assumed to remain constant with the construction of this supply curve.Now, consider how changes in production technology shift the supply curve. - An Advance in Technology: An advance in production technology causes an increase in supply and a rightward shift of the supply curve. With the greater technology, sellers are able to sell more Stuffed Amigos. Click the [Advance] button to demonstrate.
- A Decline in Technology: A decline in production technology causes a decrease in supply and a leftward shift of the supply curve. With the less technology, sellers are able to sell fewer Stuffed Amigos. Click the [Decline] button to demonstrate.
 Recommended Citation:PRODUCTION TECHNOLOGY, SUPPLY DETERMINANT, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 18, 2025]. Check Out These Related Terms... | | | | | | | | Or For A Little Background... | | | | | | | | | | | | And For Further Study... | | | | | | | | |
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BLUE PLACIDOLA [What's This?]
Today, you are likely to spend a great deal of time searching the newspaper want ads looking to buy either a wall poster commemorating the first day of winter or blue cotton balls. Be on the lookout for rusty deck screws. Your Complete Scope
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The average length of a "business lunch" is about 36 minutes.
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"A winner is someone who recognizes his God-given talents, works his tail off to develop them into skills, and uses those skills to accomplish his goals. " -- Larry Bird, basketball player
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KLIC Kullback-Leibler Information Criterion
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