Answer:1 The fundamental economic problem occurs because resources have to be allocated amongst competing uses since wants are infinite whilst resources are scarce.
i You and your family: unless you are very wealthy, you and your family will never have enough money/income to satisfy all of your wants. For example, you might want to go to see a film but do not have enough money to do so; your family may want to buy the latest flat-screen TV but does not have enough spare income to purchase it.
ii Government: all governments face the economic problem since they never have enough money in their budgets to be able to fund all of the wants that are required. As a result choices and priorities have to be made. Typical choices to be made are, for example, between spending more on an infant health programme or on an infant educational programme. The limited budget means that both cannot be funded.
iii Manufacturing business: revenue and capital funds for any business are limited either through what is available inside a business or what can be borrowed outside. So, a firm might like to replace all of its outdated machinery but because it lacks the capital available to be able to do so can only replace some of it.
2 A typical answer, which includes examples from your country, could be:
Description
Typical Examples
Land
Labour
Capital
Enterprise
Natural resources
Workers, human resources
Man-made aids for production
Organisation of production, taking risks
Copper, water, tropical climate Labourers, supervisors, managers Factories, machines airports Business managers, entrepreneurs
3 A possible answer:
Specialisation is where a firm concentrates its production on those goods where it has an advantage over others. It can apply in the case of people in the workplace, for example, where a firm concentrates production on a limited range of products. A consequence of specialisation is that the firm can produce more than if it is producing a wider range of products with the same resources. The division of labour is where the production process is split into individual tasks that are carried out in order. It has important benefits for a firm and for the economy including an increase in productivity and quality of goods that are produced compared to if each worker was making the product from scratch.
4 i Free market economy: Singapore
The market mechanism operates across a wide range of goods and services; there is limited government intervention, mainly in terms of regulations, budgetary and foreign policy. Minimal provision of public goods and merit goods.
Explanation:
