Prior to World War II, the race of Massachusetts was an important location for t

Question

Prior to World War II, the race of Massachusetts was an important location for the production of shoes and textiles. After the war, a number of events including the importation of relatively cheap foreign shoes and textile manufactures displaced these two industries. In their place a number of different industries developed, including the computer industry. Using these stylized facts, answer the following questions. What do you think was the effect of the importation of relatively cheaper foreign shoes on the demand and price of domestically made shoes. Use a graph to illustrate your answer. ( 5 pa) What impact will technological improvement ( in the production of computers) have on the computer market? Use a graph to explain what will happen to the price and quantity cold of computers. What impact will these changes ( those of pan b) in the personal computer industry and market have on the market for floppy disks and on the market for typewriters. Illustrate each answer with a graph. Use a PPC graph to show the Massachusetts economy making the transition from the production of shoes and textiles to the production of computers. Also show and explain what would happen if the economy was not able to such transition.

Explanation / Answer

a)demand got increased as price went down as by demand law price is inversely proportional to demand b) people will buy more computers, so demand increase as well as supply c) floppy disk market will go up but type writer market will go down d)if not able to such transition then after some time computer demand will go down and so textile will be produced again.

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