Question

suppose that ireland has placed a tariff of 12% on its exports and a tariff of 21% on its imports. if ireland has tariff revenue worth (equivalent us dollars) $9,148,200 and a balance of trade of $7,100,000, what are its exports and imports worth?
a. $950,416 in imports, $8,050,416 in exports
b. $3,145,984 in imports, $10,245,984 in exports
c. $1,921,122 in imports, $9,021,122 in exports
d. $25,140,000 in imports, $32,240,000 in exports
please select the best answer from the choices provided
a
b
c
d

Explanation:

Step1: Define Variables

Let \( E \) be exports and \( I \) be imports. Tariff revenue from exports: \( 0.12E \), from imports: \( 0.21I \). Total tariff revenue: \( 0.12E + 0.21I = 9,148,200 \). Trade balance: \( E - I = 7,100,000 \) (so \( E = I + 7,100,000 \)).

Step2: Substitute \( E \) into Revenue Equation

Substitute \( E = I + 7,100,000 \) into \( 0.12E + 0.21I = 9,148,200 \):
\( 0.12(I + 7,100,000) + 0.21I = 9,148,200 \)
\( 0.12I + 852,000 + 0.21I = 9,148,200 \)
\( 0.33I = 9,148,200 - 852,000 = 8,296,200 \)

Step3: Solve for \( I \)

\( I = \frac{8,296,200}{0.33} = 25,140,000 \) (wait, no—wait, miscalculation? Wait, original total revenue is 9,148,200. Wait, let's recalculate:
\( 0.12E + 0.21I = 9,148,200 \), \( E = I + 7,100,000 \).
So \( 0.12(I + 7,100,000) + 0.21I = 9,148,200 \)
\( 0.12I + 852,000 + 0.21I = 9,148,200 \)
\( 0.33I = 9,148,200 - 852,000 = 8,296,200 \)
\( I = 8,296,200 / 0.33 = 25,140,000 \)? Wait, but option d has imports 25,140,000 and exports 32,240,000 (since 25,140,000 +7,100,000=32,240,000). Let's check revenue:
Exports tariff: 0.12*32,240,000 = 3,868,800
Imports tariff: 0.21*25,140,000 = 5,279,400
Total: 3,868,800 +5,279,400 = 9,148,200 (matches). Trade balance: 32,240,000 -25,140,000=7,100,000 (matches). So option d is correct.

Answer:

d. $25,140,000 in imports, $32,240,000 in exports