Table 1 shows trade data for a country that exports tea and imports fertiliser. Year Value of tea exports ($ million) Value of fertiliser imports ($ million...

Assessment: Economics 9214 | Paper 1 Mock 01 | Written Paper 1 Subject: Economics - 9214

Question 1 Report

Table 1 shows trade data for a country that exports tea and imports fertiliser.

YearValue of tea exports ($ million)Value of fertiliser imports ($ million)
20248460
20259072

(a) Calculate the balance of trade in goods shown in Table 1 for 2025. [2]
(b) Analyse one possible reason why the value of fertiliser imports increased. [3]

Answer Details

(a) The balance of trade in goods shown is export value minus import value:

\[\$90\text{ million}-\$72\text{ million}=\$18\text{ million}\]

This is a \(\$18\) million trade surplus, because exports exceed imports. [2]

(b) Domestic farmers may increase production and therefore need more fertiliser. [1] Their demand for imported fertiliser rises. [1] If the price is unchanged, the greater quantity imported raises the value of fertiliser imports. [1] Alternatively, a rise in world fertiliser prices could raise import value even if quantity did not increase.

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