Suppose that Lebanon has placed tariffs on its imports and exports. The import tariff is 13%, and the export tariff is 8%. If Lebanon has a balance of trade of (equivalent US dollars) $5,510,000 and received tariff revenue of $4,019,200, what are its imports and exports worth?

Let imports be I and exports be E. A positive balance of trade of $5,510,000 means exports exceed imports by that amount: E − I = $5,510,000. Tariff revenue gives a second equation: 0.13I + 0.08E = $4,019,200. Choice B has imports of $17,040,000 and exports of $22,550,000; their difference is $5,510,000, and their tariff revenue is $2,215,200 + $1,804,000 = $4,019,200.

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