Neco Model Questions Vol1 2017 Commerce Question 2

Practice essay / theory question 2 from the 2017 Neco Model Questions Vol1 Commerce examination. This question covers Trade .

Neco Model Questions Vol1 2017 Commerce Essay / Theory
Topic: Trade
Question 2 NECO_MODEL_QUESTIONS_VOL1 • 2017 • COMMERCE • essay

Nigeria imports wheat and exports cocoa. In the current year the country imports 3,000 tonnes of wheat at US$0.30 per kilogram and exports 1,200 tonnes of cocoa at US$2.00 per kilogram. The prevailing exchange rate is ₦410 per US$. The government imposes a 5 % tariff on wheat imports and grants a 10 % export rebate on cocoa earnings. After import, the wheat is processed locally, adding a value of ₦15 per kilogram, and the processed wheat is sold in the domestic market at ₦180 per kilogram.

Question Parts

( a )
Calculate the total value of wheat imports in Naira before the tariff and the total value after the 5 % tariff is applied.
( b )
Calculate the total foreign‑exchange earnings from cocoa exports in Naira after applying the 10 % export rebate.
( c )
Determine the overall trade balance (exports minus imports) in Naira after accounting for the tariff and the export rebate.
( d )
Suggest one policy measure the Nigerian government could adopt to improve the trade balance and briefly explain how it would work.

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About This Question

This is Neco Model Questions Vol1 2017 Commerce Question 2. It is one of the essay questions from the 2017 Neco Model Questions Vol1 Commerce examination.

The question covers Trade .

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