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? a. $30,916,923 in imports, $50,240,000 in exports b. $17,040,000 in imports, $22,550,000 in exports c. $6,226,300 in imports, $5,950,800 in exports d. $4,793,700 in imports, $5,069,200 in exports
Answers
The import tariff is 13%, and the export tariff is 8%.
Lebanon has a balance of trade of (equivalent US dollars) $5,510,000 and received tariff revenue of $4,019,200.
Export - Import = Trade Balance
E - I = 5,510,000 ..............(1)
Export traffic + Import traffic = Traffic revenue
8 % + 13 % = $4,019,200
⇒ 0.08 E + 0.13 I = 4,019,200 ...........(2)
solving equations (1) and (2), we get,
from (1) E = 5,510,000 + I
from (2), we have,
0.08 E + 0.13 I = 4,019,200
0.08 ( 5,510,000 + I ) + 0.13 I = 4,019,200
440800 + 0.08 I + 0.13 I = 4,019,200
0.08 I + 0.13 I = 4,019,200 - 440800
0.21 I = 3578400
I = 3578400 / 0.21
∴ I = 17,040,000
from (1), we have,
E = 5,510,000 + I
E = 5,510,000 + 17,040,000
∴ E = 22,550,000
Therefore, we have, $17,040,000 in imports, $22,550,000 in exports
Option b is correct.
Answer:
option b is correct
Step-by-step explanation: