ChinaImpose trade sanctions againstU.S. firmsDo not impose trade sanctionsagainst U.S. firmsChina trade value = $75 b U.S.China trade value = $5 bDon't renew MFNtrade value = $65 bU.S. trade value = $140 bstatus with ChinaUnited StatesChina trade value = $285 bU.S. trade value = $35 bChina trade value = $275 b U.S.Renew MFN statustrade value = $130 bwith ChinaUse a payoff matrix to depict this problem.a. Players.b. Strategy.с. Рау-off.d. What is the dominant strategy?e. What is the Nash Equilibrium without an enforceable contract?f. If countries coordinated (collude), what would be the optimal outcome?

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China Impose trade sanctions against U.S. firms Do not impose trade sanctions against U.S. firms China trade value = $75 b U.S. China trade value = $5 b Don't renew MFN trade value = $65 b U.S. trade value = $140 b status with China United States China trade value = $285 b China trade value = $275 b U.S. Renew MFN status with China U.S. trade value = $35 b trade value = $130 b Use a payoff matrix to depict this problem. a. Players. b. Strategy. с. Рау-off. d. What is the dominant strategy?

China Impose trade sanctions against U.S. firms Do not impose trade sanctions against U.S. firms China trade value = $75 b U.S. China trade value = $5 b Don't renew MFN trade value = $65 b U.S. trade value = $140 b status with China United States China trade value = $285 b China trade value = $275 b U.S. Renew MFN status with China U.S. trade value = $35 b trade value = $130 b Use a payoff matrix to depict this problem. a. Players. b. Strategy. с. Рау-off. d. What is the dominant strategy?

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter20: The Global Economy

Section: Chapter Questions

Problem 8AA

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