QUESTION ONE [40]

1. 1.1 Explain the two main primary factors of production utilised in the manufacturing of goods and services. (12)
2. 1.2 Discuss technological improvement as a factor that contributes to economic growth in terms of the production possibility frontier model. (Assume there is technological progress in the production of both the goods). Use a diagram to motivate your answer. (14)
3. 1.3 Assess the following factors in relation to the basic economic problem of scarcity. Use examples to motivate your answer:
4. 1.3.1 Opportunity cost (7)
5. 1.3.2 Efficiency (7)