Neco 2018 Government Question 36

Practice objective / multiple choice question 36 from the 2018 Neco Government examination.

Neco 2018 Government Objective / Multiple Choice Hard Difficulty
Question 36 NECO • 2018 • GOVERNMENT • objective

Nigeria is evaluating two foreign‑policy options for crude‑oil exports. Option A reduces the export tax by 15% and opens access to Country X, whose annual import demand is 2 million barrels at a post‑tax price of \(55\) dollars per barrel. Option B signs a bilateral agreement with Country Y, imposing a 10% export tax but providing a subsidy of \(5\) dollars per barrel for up to 1.5 million barrels; the market demand there is 1.8 million barrels at a pre‑tax price of \(60\) dollars per barrel. Assuming each market can be fully supplied, calculate the net revenue (in million dollars) for each option and state which option yields the higher net revenue.

Answer Options

A. Option A yields higher net revenue: Option A = 108 million dollars, Option B = 106.5 million dollars.
Correct Answer B. Option A yields higher net revenue: Option A = 110 million dollars, Option B = 104.7 million dollars.
C. Option A yields higher net revenue: Option A = 115 million dollars, Option B = 104.7 million dollars.
D. Option B yields higher net revenue: Option A = 110 million dollars, Option B = 112 million dollars.
Correct Answer
B
Correct Option:
Option A yields higher net revenue: Option A = 110 million dollars, Option B = 104.7 million dollars.

About This Question

This is Neco 2018 Government Question 36. It is one of the objective questions from the 2018 Neco Government examination.

Difficulty level: Hard .

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