Consider the following information, and answer the question below. China and Eng

Question

Consider the following information, and answer the question below. China and England are international trade partners. The following data are expected payoffs for the two countries. o Both China and England use a tariff; payoff equals -25 for both nations. o Both China and England allow free trade; payoff equals 25 for both nations. o China uses a tariff, but England allows free trade; payoff is 45 for China and -10 for England. o England uses a tariff, but China allows free trade; payoff is 45 for England and -10 for China. Which of the following statements is TRUE? a. Both China and England allow free trade because of the prisoner's dilemma. b. England uses a tariff, but China allows free trade because of the prisoner's dilemma. c. China uses a tariff, but England allows free trade because of the prisoner's dilemma. d. Both nations impose a tariff because of the prisoner's dilemma. Please select the best answer - you will be rated. Thank you.

Explanation / Answer

d. Both nations impose a tariff because of the prisoner's dilemma.

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