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?

Let imports be I and exports be E. A $7,100,000 trade surplus means E = I + $7,100,000. Tariff revenue is 12% of exports plus 21% of imports, so 0.12(I + $7,100,000) + 0.21I = $9,148,200. Solving gives imports of $25,140,000 and exports of $32,240,000, which is choice D.

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