Question 1 (10 marks) Using the PPF model, discuss how a poor harvest changes Freshgold’s production possibilities and whether storage technology could alter this constraint. Question 2 (8 marks) Choose any two (2) factors of production and discuss how their scarcity or improvement could influence productivity and competitiveness. Question 3 (12 marks) a. Using the Circular Flow Model, explain how receiving export payments in Rand instead of USD could affect different sectors of the South African economy, referring to at least two linkages. (6) b. Discuss any two factors from the case study that could lead to a shift in the supply or demand curves for South African apples. In each case, explain clearly whether it affects demand or supply and the direction of the shift.

multipleQuestions newQuestion Using the PPF model, discuss how a poor harvest changes Freshgold’s production possibilities and whether storage technology could alter this constraint. newAnswer A poor harvest shifts Freshgold's production possibilities frontier (PPF) inward, indicating a decrease in potential output; improved storage technology could mitigate this by allowing for better preservation of existing produce, effectively expanding the PPF. newQuestion Choose any two (2) factors of production and discuss how their scarcity or improvement could influence productivity and competitiveness. newAnswer Labor and capital are two factors of production; labor scarcity can lead to higher wages and reduced output, while improvements in capital, such as advanced machinery, can enhance productivity and competitiveness by increasing efficiency. newQuestion Using the Circular Flow Model, explain how receiving export payments in Rand instead of USD could affect different sectors of the South African economy, referring to at least two linkages. newAnswer Receiving export payments in Rand instead of USD could lead to a depreciation of the Rand, affecting the export sector negatively by making goods more expensive for foreign buyers, while benefiting domestic consumers through lower import prices; this creates linkages between the trade balance and domestic consumption. newQuestion Discuss any two factors from the case study that could lead to a shift in the supply or demand curves for South African apples. In each case, explain clearly whether it affects demand or supply and the direction of the shift. newAnswer A rise in consumer income could increase demand for South African apples, shifting the demand curve to the right, while an increase in production costs (e.g., labor or materials) could decrease supply, shifting the supply curve to the left.