Neco 2023 Commerce Question 2

Practice essay / theory question 2 from the 2023 Neco Commerce examination. This question covers Trade .

Neco 2023 Commerce Essay / Theory

Topic: Trade

Question 2 NECO • 2023 • COMMERCE • essay

In 2022 Nigeria imported 1.2 million tonnes of wheat at an average price of ₦150,000 per tonne and exported 0.8 million tonnes of cocoa at an average price of ₦250,000 per tonne. The exchange rate at that time was ₦410 = US$1. The world market price of wheat was US$350 per tonne and that of cocoa was US$2,200 per tonne.

Question Parts

( a )

Calculate the total value of wheat imports in Naira and in US dollars.

( b )

Calculate the total value of cocoa exports in Naira and in US dollars.

( c )

Using the world market prices as the base, compute Nigeria's terms of trade index. (Use the formula: Terms of Trade = (Export Price Index ÷ Import Price Index) × 100). Show all steps.

( d )

Based on the terms of trade obtained, comment on whether Nigeria's trade position is favourable and suggest one policy measure that could improve it.

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About This Question

This is Neco 2023 Commerce Question 2. It is one of the essay questions from the 2023 Neco Commerce examination.

The question covers Trade .

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