With the help of a diagram, assess the view that government intervention can be used successfully to correct market failure caused by positive externalities.

Explain what economists mean by collusion and consider the view that collusion will occur only in a certain type of market structure.

Explain the difference between a proportional income tax system and a progressive income tax system.

Discuss whether or not advances in technology will benefit a country’s population.

Explain why public goods would not be supplied in a market economic system.

Discuss how a government’s policies toward income and wealth distribution can affect a consumer’s demand.

Discuss whether profit maximisation is the best strategy in the long run for firms in different market structures.

Discuss the effectiveness of supply-side policies in increasing the supply of enterprise to the economy.

Singapore is usually ranked as one of the best countries in which to do business. It is an open economy engaging in free trade. It has a history of strong entrepreneurship, low unemployment, low average costs and relatively low tax rates. Its example may encourage other countries to remove trade restrictions.

Discuss whether low unemployment in a country will encourage multinational companies (MNCs) to set up there. [8]

Use examples to illustrate the difference between private goods and public goods and explain why only private goods will be supplied in a free market economy. [8]