👑Resource Allocation and Efficiency  Essays

Explain how a production possibility curve can be used to demonstrate scarcity, choice and opportunity cost.

Discuss whether or not an economy would benefit from allocating more of its resources to agriculture.

(8 marks)

Consumers in Uruguay are eating more processed foods. Factors of production, including enterprise, have responded to this change. Firms in the processed food industry have become more capital-intensive. All of Uruguay’s industries were affected by the rise in its inflation rate, from 6.2% in 2017 to 7.7% in 2018

Analyse why a firm may become more capital-intensive (6 Marks)

Explain how the factor of production enterprise contributes to aggregate supply in a modern economy and how it differs from the other factors of production in terms of the reward its services.

[8 marks]

Discuss the way in which resources are allocated in planned economies and free market economies. Consider which type of economic system is likely to have the more beneficial outcome. [12]

‘Free markets make the most efficient use of resources and are the foundation of a successful economy.’ To what extent do you agree with this?

Farms in the USA are getting larger. One dairy farm in the state of Indiana has over 38 000 cows. Farms in the USA compete with farms in both developed and developing countries. The value of the farms’ exports of milk appears in the trade in goods section of the current account of the USA’s balance of payments

Analyse the economies of scale from which a farm may benefit.

Explain the different ways in which resources are allocated in a market economy and in a mixed economy [8]

Show the difference between a movement along, and a shift in, a production possibility curve. Explain what might cause each to occur. Use diagrams to support your answer. [8]

Explain the role of the factor enterprise in allocating resources in a market economy when there is an increase in the demand for a good. Use a diagram to support your answer.

Discuss the policies that a government might adopt to increase the price elasticity of supply of agricultural goods in an economy and consider which policy is likely to be most effective. [12]

‘The factor enterprise and the free working of the price mechanism always ensure a satisfactory outcome for consumers even when imperfect information exists.’ Discuss this view.