EconomicsThe matrix given below represents the pay offs to two large countries, Zombec and Firan, each importing different set ofproducts from the other. Each country's government must choose between two distinct trade policies, free trade and optimaltariffs. Each policy choice represents a game strategy.FiranZombecFree tradeOptim al tariff5060Free trade5030304060Optimal tariff40Determine 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 tariffOc 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.

Nash Equilibrium refers to the decision-making theorem, that states a player can achieve the desired…

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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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