Chapter 2 Flashcards
What is a theory?
An organized system of accepted knowledge to explain phenomena.
What is shared definition?
A common definition shared by all.
What is a hypothesis?
An intelligent or educated guess.
What is applied economics
The application of economic theories to solve and understand real-world situations.
When was applied economics said to have started?
Over 200 years ago.
Who are the pioneers of applied economics?
Jean-Baptiste Say and John Stuart Mill.
Lifespan of Jean-Baptiste Say
1767-1832 (65 years)
Lifespan of John Stuart Mill
1806-1873 (66 years)
Mill’s nationality
English
Say’s nationality
French
What is Say’s Law?
Say’s Law or The Law of the Markets (1803) states that the production of goods creates its own demand.
Why is there demand according to Say’s Law?
Because of the production of goods and services.
Who is Adam Smith?
The Father of Economics
The Father of Capitalism
What is the Malthusian Theory
The Malthusian Theory of Population Growth
“The theory of exponential/geometric population growth and arithmetical food supply growth.”
What is the main idea of the Malthusian Theory?
There will be disequilibriun on food and population size because the population grows faster than food supply; therefore, lack of food to the whole population.
