In the context of economics, what is the typical effect of new technology on production?

• A. It decreases the overall output by making processes more complex.
• B. It always increases the cost of production.
• C. It increases the efficiency and output of production.
• D. It has no significant impact on production.

Answer: (C)

Verified step by step guidance

1. Understand the role of technology in production: Technology refers to the methods, processes, and knowledge used to produce goods and services.
2. Recognize that new technology typically improves the production process by making it more efficient, which means producing more output with the same or fewer inputs.
3. Recall that increased efficiency usually leads to higher overall output because resources are used more effectively.
4. Note that new technology does not necessarily increase the cost of production; often, it reduces costs by saving time, labor, or materials.
5. Conclude that the typical effect of new technology on production is to increase efficiency and output, rather than decreasing output or having no impact.