(a) The supply of a commodity refers to the quantity of that good or service that producers are willing and able to offer for sale at various prices over a given period, assuming other factors remain constant (ceteris paribus). It reflects the relationship between price and quantity supplied, typically showing that higher prices incentivize greater production due to potential profits.

(b) An increase in the minimum wage raises the cost of labor for Mont Richeon Ltd., as it must pay workers higher salaries. This elevates the overall production costs, leading to a leftward shift in the supply curve for concrete blocks. Consequently, at any given price, the quantity supplied decreases, potentially resulting in higher market prices and lower output unless offset by productivity gains or cost reductions elsewhere.

(c) An economic system is the structured framework through which a society organizes the production, distribution, and consumption of goods and services. It encompasses institutions, policies, and mechanisms that address the fundamental economic problems of what to produce, how to produce, and for whom to produce, influenced by factors like resource allocation and ownership.

(d) Ghana is classified as a mixed economic system for the following reasons:

• It combines elements of both market and command economies, with private enterprises operating alongside government-owned entities, such as in sectors like agriculture (private-dominated) and utilities (state-involved via entities like the Volta River Authority).
• The government intervenes through policies like subsidies, regulations, and public investments (e.g., in infrastructure under the Ghana Infrastructure Investment Fund), while allowing market forces to determine prices in many areas, balancing efficiency with social welfare.

(e) The Interest Rate Elasticity of Demand (IED) for loans is calculated using the formula: IED = (Percentage change in quantity demanded) / (Percentage change in interest rate).

Percentage change in quantity demanded = (New demand – Old demand) / Old demand × 100 = (150,000 – 200,000) / 200,000 × 100 = -25%.

Percentage change in interest rate = (40% – 20%) / 20% × 100 = 100%.

Thus, IED = -25% / 100% = -0.25.

Interpretation: The demand for loans is inelastic (absolute value < 1), meaning a 1% increase in interest rates leads to only a 0.25% decrease in loan demand. Borrowers are relatively insensitive to rate changes, possibly due to essential needs like business expansion in Ghana’s economy.