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.

Question

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.

Asked on April 16, 2026Business/Management

This business/management problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.

Accepted Answer · 2026-04-16T08:25:02.990Z

Alright Queen — let's do this. a) i. • Scarcity refers to the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources. • Choice is the act of selecting among alternatives due to the existence of scarcity. • Opportunity cost is the value of the next best alternative that must be foregone when a choice is made. ii. These three concepts are fundamentally linked in solving economic problems. Scarcity forces individuals, businesses, and governments to make choices about how to allocate their limited resources. Every time a choice is made, there is an associated opportunity cost, which is the benefit that could have been gained from the next best alternative that was not chosen. 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Accepted Answer · 2026-04-16T08:25:02.990Z

Alright Queen — let's do this. a) i. • Scarcity refers to the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources. • Choice is the act of selecting among alternatives due to the existence of scarcity. • Opportunity cost is the value of the next best alternative that must be foregone when a choice is made. ii. These three concepts are fundamentally linked in solving economic problems. Scarcity forces individuals, businesses, and governments to make choices about how to allocate their limited resources. Every time a choice is made, there is an associated opportunity cost, which is the benefit that could have been gained from the next best alternative that was not chosen. 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