1. The escape from the Malthusian trap, in which technological progress outstripped the effects of population growth, took place following the emergence of capitalism. Consider the three basic institutions of capitalism in turn:

Why is private property important for technological progress to occur?

Explain how markets can provide both carrots and sticks (positive and negative incentives) to encourage innovation.

How can production in firms, rather than families, contribute to the growth of living standards?