Click on the application and select File > Get Info

You will now see the Memory Requirements on the bottom of the Get Info Screen.

The 'Suggested size' is set by the creator of each application. This is their best guess for how much memory the application would require in general use. This amount may, or may not be appropriate for your needs.

The 'Minimum size' is the least amount of memory an application will open with. If this minimum amount isn't available, the application won't open and the system willprovide a message like the one on the left.

The 'Preferred size' is the amount of memory that will be used for the application if it is available. Generally this is the amount that you will be the most concerned about.

When you open an application it reserves a certain amount of space in memory for itself. Everything you do, in that application, is either kept in that area of memory or it is transferred to the hard drive. If an application has to transfer information from memory to the hard drive, this will mean that the application will function slower. A classic example of this is Photoshop. If you try to open a file that is larger than the available memory, it will move some of the information to your hard drive. Other applications just keep everything in memory and will come up with a message like the one above if there is not enough memory available.