Singapore is a high-income country with a shortage of land and labour. Singapore is often given as an example of a market economy. The Singaporean government does, however, intervene in the economy. For example, it encourages its population to eat two servings of fruit and two servings of vegetables per day.

Mark scheme

Marking points from the official mark scheme (May/June 2022). The mark or mark type is shown in brackets.

1. [1] Wages (1)
2. [1] rent (1).
3. [1] An increase in income will enable a worker to spend more on their education (1)
4. [1] increasing occupational mobility (1).
5. [1] Higher income will make housing more affordable (1)
6. [1] increasing geographical mobility (1).
7. [1] Higher income will make high-tech products more affordable (1)
8. [1] enabling a worker to be better informed (1)
9. [1] increasing both occupational and geographical mobility (1).
10. [1] Higher incomes may discourage a worker from changing jobs / may be content with current job (1)
11. [1] may be satisfied with income level (1)
12. [1] reducing geographical and occupational mobility (1).
13. [1] Higher incomes make it easier to afford car / use public transport (1)
14. [1] increases geographical mobility (1).
15. [1] Axes correctly labelled-price and quantity or p and q (1).
16. [1] Original demand and supply curves correctly labelled (1).
17. [1] New demand curve shifted to the right (1).
18. [1] Equilibriums-shown by lines P1 and Q1 and P2 and Q2 or equilibrium points E1 and E2 (1).
19. [1] Greater awareness of health benefits will encourage more people to eat / demand fruit (1)
20. [1] Raise price / raise quantity traded (1).
21. [1] profit incentive and competition may increase efficiency
22. [1] wage differentials may encourage effort
23. [1] price may be low and quality high
24. [1] country's products may be internationally competitive
25. [1] economic growth may be high
26. [1] consumer choice may be high
27. [1] consumer sovereignty may be high
28. [1] risk of market failure
29. [1] public goods will not be provided
30. [1] demerit goods are overconsumed and merit goods and under-consumed
31. [1] problem of pollution and other external costs
32. [1] unemployment may be high as lack of co-ordination
33. [1] some countries may lack the support structures e.g., legal system to enforce property rights to allow market forces to work efficiently.
34. [1] monopolies can be created