Q1) Over the past 30 years, technological advances have reduced the cost of computer chips. How do you think this has affected the market for computers? For computer software? For typewriters?

Q2) Consider the markets for DVDs, TV screens, and tickets at movie theaters.

a.For each pair, identify whether they are complements or substitutes:

DVDs and TV screens

DVDs and movie tickets

TV screens and movie tickets

b.Suppose a technological advance reduces the cost of manufacturing TV screens. Draw a diagram to show what happens in the market for TV screens.

c.Draw two more diagrams to show how the change in the market for TV screens affects the markets for DVDs and movie tickets.