Unit 2: Technology, Population & Growth Flashcards
What is the Malthusian trap?
A cycle where increased income leads to population growth, which reduces income back to subsistence.
Who developed the Malthusian model?
Thomas Robert Malthus in 1798.
Why did the world remain poor for so long?
Because population growth offset any income gains from productivity improvements.
How did the Industrial Revolution break the Malthusian trap?
Technological progress outpaced population growth, allowing sustained income growth.
Why did the Industrial Revolution start in Britain?
High wages and cheap energy made it cost-effective to adopt labour-saving technology.
What is a production function?
A relationship showing output as a function of inputs (Y = f(X)).
What happens to the average product of labour as more workers are added?
It declines due to diminishing returns.
What is an isocost line?
A line showing all combinations of inputs that have the same total cost.
How do firms choose technologies?
They compare total costs of input combinations based on input prices.
What happens when the price of coal falls?
Firms adopt more coal-intensive (energy-intensive) technologies.
What caused Britain’s firms to adopt energy-intensive technologies?
High wages and cheap coal.
What is average product of labour (APL)?
Output divided by the number of workers (Y/X).
What happens in the Malthusian model when income rises?
Population increases, reducing APL and income back to subsistence.
What defines a Malthusian equilibrium?
Stable population and income at subsistence level.
How does technological progress affect the production function?
It shifts the function upward, allowing more output per worker.
What does the Malthusian model predict about long-run income per capita?
It remains at subsistence unless technology improves fast enough.
Why didn’t other countries industrialize first?
They lacked the relative factor price incentives (low wages, expensive energy).
How does population affect wages in the Malthusian model?
More people lead to lower wages due to diminishing APL.
What is meant by ‘subsistence level’ in the model?
The level of income at which the population neither grows nor shrinks.
Why is the Industrial Revolution considered a turning point?
It marked the start of sustained growth in living standards.
