Neco Model Questions Vol1 2025 Commerce Question 2

Practice essay / theory question 2 from the 2025 Neco Model Questions Vol1 Commerce examination. This question covers Trade .

Neco Model Questions Vol1 2025 Commerce Essay / Theory

Topic: Trade

Question 2 NECO_MODEL_QUESTIONS_VOL1 • 2025 • COMMERCE • essay

Country X engages in international trade as follows: it imports 2,000 tonnes of wheat at $150 per tonne and exports 1,200 tonnes of cocoa at $250 per tonne. The prevailing exchange rate is ₦400 per US$1. The government imposes a 10 % tariff on wheat imports and offers a 5 % subsidy on cocoa exports.

Question Parts

( a )

Calculate the total value of wheat imports in Naira (₦) before the tariff and after the tariff is applied.

( b )

Determine the total value of cocoa exports in Naira before the subsidy and after the subsidy is applied.

( c )

Calculate the trade balance (exports − imports) in Naira after the tariff and subsidy have been applied. State whether the balance shows a surplus or a deficit.

( d )

If the exchange rate appreciates to ₦360 per US$1, recompute the trade balance after applying the same tariff and subsidy. Explain briefly how the appreciation of the Naira affects the trade balance.

Detailed Solution & Marking Scheme

Get the step-by-step solution, key points required by examiners and detailed marking guidance through the Edcrib AI Tutor.

Reveal Answer

About This Question

This is Neco Model Questions Vol1 2025 Commerce Question 2. It is one of the essay questions from the 2025 Neco Model Questions Vol1 Commerce examination.

The question covers Trade .

View More Neco Model Questions Vol1 2025 Commerce Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows

Chat with Support