Malthusian Economics

Question 1

Average Product of Labour (APL)

Answer 1

Total output divided by Total Input

Question 2

Marginal Product of Labour (MPL)

Answer 2

Change in Output divided by Change in Labour

Question 3

Total Subsistence Output

Answer 3

Number of Labour (I.e number of farmers) Multiplied by the Subsistence Level

Question 4

Equilibrium

Answer 4

Occurs when total output equals the substance level or is close to it.

Question 5

Calculate Percentage Increase

Answer 5

Output multiplied by percentage increase- 800 (output) x 1.3 (30% increase)

Question 6

How is the Malthusian Trap Explained?

Answer 6

-Better technology or way of producing output, allows better sustainability which leads to a rise in living standards temporarily
-Due to this number of people may rise, which will increase the population over the subsistence level.
- Better technology leads to more productive output, leading to population growth which leads to a cyclical circle back to the same situation again.

Question 7

Explain the Malthusian Model

Answer 7

Land and Labour are the two inputs of the production process. Land is fixed and population is variable

1. Agricultural output determines living standards
2. Living standards affect the size of the population
3. Size of the population affects agricultural output

Question 8

The Malthusian Trap

Answer 8

In the model, technological innovations enables larger population but not above subsistence income levels.

Question 9

Index

Answer 9

Value of some quantitive amount relative to its value at some other time (the reference period) usually normalised to 100

Question 10

‘Real’

Answer 10

The money wage, that is adjusted each year to take into account the change in prices over time- Real buying power of the money.

Question 11

Subsistence Income

Answer 11

Just about high enough for the population to reproduce- higher income means population grows and lower income means population shrinks

Question 12

Explain the function of the ‘hockey stick’ model

Answer 12

Most people generated their income from agriculture, living standards were dependent on agricultural production. Malthus argued that sustained increase would be impossible.
Population expands as living standards increase, and as population expands labour on land becomes less productive.

Question 13

Production Function

Answer 13

Y=F (X) ‘y is a function of x’

Question 14

Poverty trap

Answer 14

Population rises when agricultural productivity rises. More children are born and will eventually work on the land, which will lead to less productive labour, lower living standards, and population will decrease again,

Question 15

Define Capitalism

Answer 15

An economic system characterised by a particular combination of institutions

Question 16

Three main aspects of Capitalism

Answer 16

1. Private property
2. Firms
3. Markets

Question 17

Private Property

Answer 17

Ownership of property In an individual’s right. Cannot be touched but you have the right to dispose of it.
Individuals, families or NGOs

Question 18

Markets

Answer 18

Connect people who have mutually beneficial actors.
Exchange of goods, buying and selling
Encourages competition

Question 19

Firms

Answer 19

An economic organisation in which private owners of goods, hire labour to produce goods and services to sell on a market to make a profit.

Question 20

Affects of Capitalism on the economy

Answer 20

Specialisation, competitive markets, merit based system, goods and services like education and infrastructure are provided.
Innovation and technological growth.

Question 21

Malthusian Trap

Answer 21

Technological growth outpacing population growth
Falling birth rates with rising incomes
Increase in education and skills
Transformation from agriculture to Industry

Question 22

Define Economics

Answer 22

The study of scarcity and its implications of resources, production of goods and services growth and production over time.

Question 23

First Industrial Revolution

Answer 23

18th and 19th century- shift from manual labour to mechanisation
Mechanised looms, steam engines
Affected the agriculture and textile industries

Question 24

Second Industrial Revolution

Answer 24

Late 19th early 20th century
Electricity, mass production, railways, telegraph
chemicals, automobiles, electrical engineering
Faster cheaper production, labour market disruption