Neco Model Questions Vol1 2020 Economics Question 36
Practice objective / multiple choice question 36 from the 2020 Neco Model Questions Vol1 Economics examination.
Country X exports coffee and imports oil. Initially it exports 1,000 tons of coffee at $5 per ton and imports 800 tons of oil at $4 per ton. The world price of coffee rises by \(20\%\) while the price of oil rises by \(10\%\). The price elasticity of export quantity is \(-0.5\) and that of import quantity is \(0.3\). Calculate the percentage change in the terms of trade (export‑price index divided by import‑price index, expressed as a percentage).
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About This Question
This is Neco Model Questions Vol1 2020 Economics Question 36. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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