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Some types of technological change (e.g., mass production of personal computers or miniaturization of components) reduce...

Some types of technological change (e.g., mass production of personal computers or miniaturization of components) reduce the cost of capital. Use the concepts of substitutability and complementarity to discuss how such technological change could be good for some types of workers and bad for other types of workers.

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Answer #1

Some technological advances can have positive effects on employment as well as pay for workers. If the advancement is complementary totlanour, it increas productivity of existing workers and also generates more demand for labour by opening new industries and increasing production. This can happen if the production function can be transformed from decreasing returns to constant or increasing returns implying that production can be greatly increased by employing more labour.

It can also have a negative impact if the new technology is a substitute for labour. In that case, a firm will save labour costs by replacing labour by machines and hence unemployment will increase

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