1. A) Changes in technology can cause changes in the productivity of a resource. Technological change can be economy-wide, industry specific, or can occur within one firms production processes. Explain how a change in the productivity of a resource changes the demand for the resource. Give an example?

B) Suppose that labor and capital are substitute resources and the price of capital decreases. What happens to the demand for labor and capital? Do the producers produce more or less of the final good? Explain your answers.

C) Suppose that labor and capital are complement resources, and the price of capital decreases. What happens to the demand for labor and capital? Do the producers produce more, less, or the same amount of the final good?