Subject: ECONOMICS 📘 2026 WASSCE (JUNE/JULY) ECONOMICS – THEORY PRACTICE Answer FOUR questions only. QUESTION 1 (Compulsory – Core Principles) (a) i. Define scarcity, choice, and opportunity cost. ii. Explain how these three concepts are related in solving economic problems. (b) With the aid of a well-labeled diagram, explain the Production Possibility Curve (PPC). (c) State and explain three causes of an outward shift of the PPC. QUESTION 2 (Demand & Elasticity – WAEC Favourite) (a) State the law of demand. (b) Distinguish clearly between: i. Movement along a demand curve ii. Shift of a demand curve (c) Explain five factors that determine the price elasticity of demand. (d) Why is elasticity of demand important to a government when imposing taxes? QUESTION 3 (Theory of Production) (a) Explain the law of diminishing returns. (b) Distinguish between: i. Total product ii. Average product iii. Marginal product (c) Using a diagram, explain the three stages of production and indicate the rational stage of production. QUESTION 4 (Market Structures – Analytical) (a) State and explain five characteristics of perfect competition. (b) With the aid of diagrams, show how a perfectly competitive firm determines: i. Supernormal profit ii. Normal profit iii. Loss (c) Give three differences between perfect competition and monopoly. QUESTION 5 (Money & Banking – High Scoring) (a) Define money and explain its four primary functions. (b) Explain how commercial banks create credit. (c) Describe five instruments used by the Central Bank to control inflation. QUESTION 6 (National Income – Calculation + Theory Mix) (a) Define Gross Domestic Product (GDP). (b) Explain three methods of measuring national income. (c) State four limitations of using national income as a measure of welfare in Ghana. QUESTION 7 (Public Finance & Fiscal Policy) (a) Distinguish between direct and indirect taxes. (b) Explain five principles of taxation. (c) Discuss four advantages and four disadvantages of public borrowing. QUESTION 8 (International Trade & Development) (a) Explain the theory of comparative advantage. (b) State four arguments for trade protection. (c) Explain five characteristics of developing economies such as Ghana.