Transcript Document
Economic
Resources
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Dr. Abddelmohsen Mostafa
10 Chapters
1)Economic thought history
2)Economic Resources
3)Population growth
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Dr. Abddelmohsen Mostafa
4)Human Capital Resources
5)Physical Capital
6)Water Resources.
7)Fishery Resources
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Dr. Abddelmohsen Mostafa
8)Forests Resources
9)Land use economics
10) Environmental
problems.
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Dr. Abddelmohsen Mostafa
Chapter. 1
History of Economic
Thought:
Resources and the
Environment
The history of economic
thought is interested in
studying the development
of economics ideas and
economic theories which
is built the economy
The ideas are presented by
economists through time
such as:
Ibn Khaldun, Adam Smith,
Karl Marx, John Maynard
Keynes, David Ricardo, and
others.
Classical theory:
There is a group of
prominent economists
who had their opinions a
milestone in economic thought
like:
Adam Smith, David Ricardo,
Malthus and John Stuart Mill
These economists
formed their vision
for the future of the
economy in the light
of available resources
"land".
Adam Smith
Adam
Smith
built his basic
idea, which
holds that the community
has the ability to achieve its
economic progress
automatically
"invisible
hand".
The most important
factors to increase
economic progress:
• The division of labor,
• specialization and
• capital accumulation
Adam Smith explained
that: the final factor
that leads to stop
the capital accumulation
is "scarcity
of
natural resources."
Malthusian Thought
The classical concept in
population is based on
(Malthus theory)
Malthus’ Theory
of Population
Growth
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In 1798 Thomas
Malthus published
his views on
the effect of population
on food supply
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which describe the
relationship between:
the growth of population
and resources (food)
(in short and long run)
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Basics of
Malthus theory
An increase in
population, would
reduce per capita income.
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As population increases,
each worker has less land
with which to work
(based on the law of
diminishing marginal
productivity)
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For a given amount of land
and level of technology
•Malthus argued that:
A population would be
interested in obtaining
a subsistence level of
income. (wage)
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Further to the increase of
population in the US
and the quantity of food,
Malthus concludes that:
if population increases
every 25 years
and these statistics
were uncertain but
suggested unchecked
population would
increase in a
geometric fashion:
2, 4, 8, 16, 32, 64 …
The food supply could
only increased in
arithmetic progression,
2, 4, 6, 8, 10, 12…
Gap
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Population
growth
Deficit
Food
growth
People would have
more children, and
population would
grow
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3-Population would
adjust until income
just reached the
subsistence level.
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Malthus distinguish
between
positive checks
And
preventive checks
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positive checks
{ raising deaths)
preventive checks:
( lowering births)
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Example:
The following table
gives the main data
about population in
virtual country:
:
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Year
No. of pop
(million)
No. of food
( k. ton)
2010
2011
10
10.15
100
81.2
2012
10.353
62.118
2013
2014
10.93
11
43.72
22
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Requires:
Test the existence of the
Malthusian theory.
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The existence of the
Malthusian theory
if the per capita of food
tend to decrease
along the time.
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The per capita of food =
No of Food
No of population
In order to test the
existence of Malthus theory
we need to apply the
previous equation on the
available data as follow:
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Year
Per capita of food
2010
2011
100 ÷ 10 = 10
81.2 ÷ 10.15 = 8
2012
62.118 ÷10.353 = 6
2013
43.72 ÷ 10.93 = 4
22 ÷ 11 = 2
2014
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Where the per capita
of food tend to decrease
along the time, then:
we accept the existence
of Malthus theory in
this country.
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Richardian Thought:
David Richard was
predicted a steady
state of equilibrium.
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He is also well known
for his theories on:
-International trade,
-The labor theory of value,
- and rent.
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• Ricardo discussed that
the price of the commodity
is determined by:
• profits,
• wages
• and rent.
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In a situation where an
increase in production takes
place on old lands, the
incremental rent will be zero,
or near zero, leaving wages
and profits as the essential
determinants of price.
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Neo-classical theory:
The development of neo-classical
analysis confirmed on:
- the structure of economic activity,
and its allocation efficiency,
rather than the aggregate level
of economic activity
.
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Leon
Walras
developed neoclassical
General Equilibrium
Theory.
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and in order to doing
this, he provided the
concepts of:
efficiently and
optimality
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Alfred Marshall
(1842 - 1924)
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was responsible for
elaboration of
the partial equilibrium
supply and demand
based analysis of price
determination
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Pigou:
proved that
individuals distribute
their resources
between:
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present,
near future and
remote future
on the basis of wholly
irrational preferences
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In order to safeguard the wellbeing of future generations,
Pigou suggests a number of policies:
Taxation
Legislation
incentives for investment
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