Two countries, A and B, are deciding on their trade policies. They can each choose to set either 'High Tariffs' or 'Low Tariffs'. The table below shows the economic welfare payoffs (in billions) for each country based on their combined choices. The first number in each cell is the payoff for Country A, and the second is for Country B.
| Country B: High Tariffs | Country B: Low Tariffs | |
|---|---|---|
| Country A: High Tariffs | (20, 20) | (50, 10) |
| Country A: Low Tariffs | (10, 50) | (40, 40) |
If Country A decides to set 'High Tariffs', Country B's best response is to set '____ Tariffs'.
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Introduction to Microeconomics Course
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CORE Econ
Application in Bloom's Taxonomy
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