NECO 2005 Economics · Question 39
The recent revolution of Cassava from ordinary food crop to export crop will lead to
Options
- A.decrease in price of cassava flour
- B.decrease In production of cassava
- C.decrease In production of local starch
- D.increase In production of other crops
- E.increase in the prices of cassava products
Answer: E. increase in the prices of cassava products
Explanation written with AI and checked against the answer key
Analyze the question: Cassava has moved from being just a local food crop to an export crop. We need to find the likely economic effect of this shift.
Concept: When a commodity gains an export market, demand for it rises. Part of the output is sent abroad, so less is available locally. Producers also receive more income, which encourages them to grow more of it. With higher demand and reduced local supply, the price of the commodity and its products tends to rise (demand increases, supply to the domestic market falls).
Step-by-step evaluation:
- A. Decrease in price of cassava flour: Unlikely. Increased demand from exporters pushes prices up, not down.
- B. Decrease in production of cassava: Unlikely. A bigger market and better returns encourage farmers to produce more.
- C. Decrease in production of local starch: Not the direct effect. Starch producers may actually gain from the expanded cassava industry, and nothing says starch output falls.
- D. Increase in production of other crops: Unlikely. Farmers would shift land and resources toward cassava, so other crops may decline if anything.
- E. Increase in the prices of cassava products: Likely. Greater demand (domestic plus export) competes for the cassava supply, so raw cassava prices rise, and products made from it (garri, flour, starch) become more expensive.
Tip: When a crop becomes an export crop, think "higher demand, less left at home, so higher prices." Questions on a commodity's new export status often point to price increases.
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