Neco 2019 Commerce Question 2

Practice essay / theory question 2 from the 2019 Neco Commerce examination. This question covers Import and Export Valuation, Tariff and Tax Calculations, Subsidy Impact, Trade Balance, Policy Recommendations .

Neco 2019 Commerce Essay / Theory

Topics: Import and Export Valuation Tariff and Tax Calculations Subsidy Impact Trade Balance Policy Recommendations

Question 2 NECO • 2019 • COMMERCE • essay

Country X imports 3,000 tonnes of wheat at $200 per tonne and exports 2,000 tonnes of cocoa at $250 per tonne. The exchange rate is ₦500 per $1. The government imposes a 5% tariff on wheat imports, a 10% export tax on cocoa, and gives a subsidy of ₦10,000 for each tonne of wheat imported to support local processing.

Question Parts

( a )

Calculate the total value in naira of the wheat imports (i) before any tariff or subsidy, (ii) after adding the 5% tariff, and (iii) after applying the subsidy.

( b )

Calculate the total value in naira of the cocoa exports after the 10% export tax.

( c )

Determine the trade balance (exports minus imports) in naira after accounting for the tariff, tax and subsidy.

( d )

If the government wishes to achieve a trade surplus of at least ₦1,000,000, suggest one non‑tax policy measure that could be adopted and briefly justify how it would improve the trade balance.

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About This Question

This is Neco 2019 Commerce Question 2. It is one of the essay questions from the 2019 Neco Commerce examination.

The question covers Import and Export Valuation, Tariff and Tax Calculations, Subsidy Impact, Trade Balance, Policy Recommendations .

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