Road Performance Ltd, a tyre producer in Dandenong, Victoria, has recently signed a contract with a Japanese manufacturer to supply 10 000 motor-racing tyres to them by the end of the year. The Japanese customer is prepared to pay more than Australian buyers, so Road Performance has decided to reduce production of standard tyres for the Australian market by 10%. The manager of Road Performance has just announced that the company will restructure the factory to cut production time for each tyre and produce a better quality product. This will mean buying new capital equipment and retrenching fifteen workers. ( 1 ) Explain what is the basic economic problem that the Road Performance faces? ( 2 ) What is the opportunity cost of the company’s decision signing a contract with a Japanese manufacturer to supply 10 000 motor-racing tyres to them by the end of the year? ( 3 ) Can you give some examples of the four factors of production in Road Performance Ltd? And do you think what qualities are needed in an effective entrepreneur?