The matrix given below represents the pay offs to two large countries, Zombec and Firan, each importing different set of products from the other. Each country's government must choose between two distinct trade policies, free trade and optimal tariffs. Each policy choice represents a game strategy. Firan Zombec Free trade Optim al tariff 50 60 50 30 Free trade 30 40 60 40 Optim al tariff Determine the Nash equilibrium (if any) in the trade policy game described above. O a. The Nash equilibrium cannot be determined. Ob.Zombec will choose free trade and Firan will choose optimal tariff Oc Zombec will choose optimal tariff and Firan will choose free trade. Od. Both the countries will choose free trade. e. Both countries will choose optimal tariff
The matrix given below represents the pay offs to two large countries, Zombec and Firan, each importing different set of products from the other. Each country's government must choose between two distinct trade policies, free trade and optimal tariffs. Each policy choice represents a game strategy. Firan Zombec Free trade Optim al tariff 50 60 50 30 Free trade 30 40 60 40 Optim al tariff Determine the Nash equilibrium (if any) in the trade policy game described above. O a. The Nash equilibrium cannot be determined. Ob.Zombec will choose free trade and Firan will choose optimal tariff Oc Zombec will choose optimal tariff and Firan will choose free trade. Od. Both the countries will choose free trade. e. Both countries will choose optimal tariff
Principles of Macroeconomics (MindTap Course List)
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Chapter3: Interdependence And The Gains Rrom Trade
Section: Chapter Questions
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![Economics
The matrix given below represents the pay offs to two large countries, Zombec and Firan, each importing different set of
products from the other. Each country's government must choose between two distinct trade policies, free trade and optimal
tariffs. Each policy choice represents a game strategy.
Firan
Zombec
Free trade
Optim al tariff
50
60
Free trade
50
30
30
40
60
Optimal tariff
40
Determine the Nash equilibrium (if any) in the trade policy game described above.
O a. The Nash cquilibrium cannot be determined.
O b.Zombec will choose free trade and Firan will choose optimal tariff
Oc Zombec will choose optimal tariff and Firan will choose free trade.
Od. Both the countries will choose free trade.
e. Both countries will choose optimal tariff.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faf5a7e19-46e9-48be-849b-977d052cdcf1%2F9646b237-4dc1-4ae0-b269-a5d19e082648%2Feaywpi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Economics
The matrix given below represents the pay offs to two large countries, Zombec and Firan, each importing different set of
products from the other. Each country's government must choose between two distinct trade policies, free trade and optimal
tariffs. Each policy choice represents a game strategy.
Firan
Zombec
Free trade
Optim al tariff
50
60
Free trade
50
30
30
40
60
Optimal tariff
40
Determine the Nash equilibrium (if any) in the trade policy game described above.
O a. The Nash cquilibrium cannot be determined.
O b.Zombec will choose free trade and Firan will choose optimal tariff
Oc Zombec will choose optimal tariff and Firan will choose free trade.
Od. Both the countries will choose free trade.
e. Both countries will choose optimal tariff.
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