Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The EU and the US sign a trade agreement which restricts each party to set a tariff of at most 10% on bananas and cheese, respectively. Denoting the tariff by x for the EU and by y for the US, in light of the new trade policies the payoff to the EU is calculated as
12 + 2x - 4y + xy - x2 and the payoff to the US is calculated as
16 - 11x + 4y + 2xy - y2 The tariffs are set simultaneously.
(a) Find the best response functions and display them in a graph.
(b) Calculate the Nash equilibrium tariff levels in this game.
(c) Show that both the EU and the US would be better off without the tariffs.
(d) Since the trade agreement is new and the norm used to be to set much higher tariffs, if there is no explicit coordination between the two parties then they may not choose their Nash equilibrium tariff levels. Suppose that both the EU and the US knows that the other one is going to set the tariff in a rational manner, but that this is not common knowledge. What is the set of tariffs for each party that is consistent with this assumption? (Hint: this means that both parties know that the other one uses only best responses, but neither knows that the other one knows this about them.) Is the Nash equilibrium tariff level consistent with this assumption for the two parties?
q1. suppose bob considers borrowing 100 from sheila at a 10 percent interest rate. they both think that a 4 percent
What is it meant by "Unlike simple policy rules, inflation targeting never requires the central bank to focus solely on one key variable"?
John and Peter both want to save some money. John decides to save $1,000 every year in an account that pays 4% interest per year compounded annually. How much will be in each person’s account at the end of 20 years, counting from when John started sa..
Briefly describe the changes in predominant health problems among Americans since good record keeping began in the 1800s.
In The Communist Manifesto, what main arguments did Marx make against Capitalism? What are the strenghts and weaknesses of these arguments? Be specific.
Choose a contemporary business and discuss any three factors that may result in economies of scale for the firm
If your discount rate is 5?% compounded? annually, what is the present value today of 4 years of university costs starting 18 years from? today?
In principle, which functions of money can digital currencies such as bitcoins perform?
Why does neoclassical economics rely so heavily on underlying assumptions of human behavior and how have those assumptions been refuted by the emerging field of
An In the News article is titled "Where Do Start-ups Get Their Money?" Venture capital is important to an economy because it
Illustrate what do you suppose would happen to the price and quantity of peanut butter as incomes fall during an economic recession.
Use a monopsony model to show workers exploitation. How might a union correct for this inefficiency? How might a union create inefficiency?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd