Different countries use own economic systems to meet their needs. Each country arranges its economic system in such a way that it achieves the maximum output with scarce resources, without developing a blueprint for an economic system that will be the most efficient. Having said this, pure forms of economic systems do not exist. The best way in which to describe the economic system is that it is most of the time a mixture between the market system and the socialist system as it has a high degree of government participation and control of the economy. The question is: How can an economic system assist in managing scarce resources and provide in the needs of the country? It is a fact that South Africa has a scarcity in terms of natural resources (water, land, minerals, land, forests); capital (infrastructure, roads, machinery) and human resources (over-supply of unskilled labour and shortage of highly skilled labour). How can the economic systems assist in managing these scarcities optimally?

1.1 Given the scenario above, discuss which one of either a market economy, command economy or socialism would be more appropriate to manage scarce resources. (6)

1.2 Critique all three economic systems (market economy, command economy or socialism) by using the conservative and liberal points of view. (14)