- 20 Marks
EIB – APR 2024 – L1 – Q1 – Supply of Commodity and Economic Systems
Defines supply, explains wage impact on supply, defines economic system, reasons for Ghana as mixed economy, calculates elasticity.
Question
(a) What is meant by supply of a commodity? [4 marks]
(b) Assume that Mont Richeon Ltd. manufactures concrete blocks for sale. Explain the effects of an increase in Minimum Wage on the supply of blocks from Mont Richeon. [4 marks]
(c) Explain the term Economic System. [4 marks]
(d) Give two (2) reasons why Ghana can be classified as a Mixed Economic System. [4 marks]
(e) The Interest Rate of a bank increases from $20 %$ pa to $40 %$ pa. As a result, demand for loans decreases from $\mathrm{GHC} 200,000.00$ to $\mathrm{GHC} 150,000.00$. Calculate the Interest Rate Elasticity of Demand for loans and interpret your answer. [4 marks]
(Total: 20 marks)
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