Using game theory as an analytical tool, if one large nation
Imposes tariffs, the total cost is small; however, when several
Trading partners do the same:
A)the costs are even smaller.
B)the costs balance out and there is no harm.
C)the costs are the same but the potential gains are much smaller.
D)then all nations gain.

Question

Quizplus · Accepted Answer

When multiple trading partners impose tariffs, the potential gains from trade decrease as the costs remain the same. This results in a lose-lose situation for all countries involved. Therefore, the best choice is C.

Using Game Theory as an Analytical Tool, If One Large