Just had fibre broadband installed and the engineer connected the router to my desktop computer with an ethernet cable. I noticed that, when I switch the computer off, the wi-fi goes to sleep. Is the cable necessary?
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Not sure what you mean by 'the wifi goes to sleep' but if your PC has wifi capability, then no, you don't need to connect via an Ethernet cable.
Disconnected the ethernet cable and lost wi-fi on the computer! So I've reconnected it.
you computer cannot be connect to internet using ethernet and wifi at same time
Do you actually mean you lose 'wifi' or do you mean you lose internet connection. There seems to be a tendency these days to refer to internet connectivity as WiFi.
The router shouldn't change colour when turning off the computer. The colour changes are indications of the connectivity of the router to your broadband service, not towards your computer.
Then your computer doesn't have a wifi adapter and will need to be connected via Ethernet. Or you could buy a USB wifi dongle, they are very cheap.