Technology
Also called: Technological knowledge · Topic: Production Function, Returns and Costs · NCERT: Class 8, Ch 7 "Factors of Production"; Class 9, Ch 8 "Building Blocks in Economics: The Problem of Choice"; Class 9, Ch 9 "The Price Puzzle: What Drives the Market"; Class 12, Ch 3 "Production and Costs"
Meaning
Technology is the knowledge that decides the maximum output a firm can get from each mix of inputs. A production function always holds for a given technology. When technology improves, the maximum output from every input combination rises, and this gives a new production function. Class 8 NCERT calls technology an "enabler" because it lets businesses produce more with the same or fewer inputs. Better technology also pulls cost curves down.
Example
Drones spraying fertiliser let a farmer cover the same field with less labour and less fertiliser. UPI and GPS-based routing let businesses deliver goods and payments faster with fewer resources.
Don't confuse with
- Capital: capital means physical inputs such as machines and tools. Technology is the knowledge of how to combine inputs. A new idea can raise output even when the machines stay the same.