Question 2 Step by Step

In response to the COVID-19 pandemic several countries restricted international travel, and some even restricted the international flow of goods. The game below depicts the bilateral trade policy between France and Germany. While each county is a member of the European Union, and is thus prohibited from restricting trade, the public health crisis has led some countries to abandon their commitments to the EU.

You will examine the desirability of an EU policy prohibition closing borders. Below, you have the payoffs for each country if it chooses to close its borders to the trade of goods and services.

Close Border Don't Close Border Close Don't Close Border G: 90 billion Border G: 18 billion G: 680 billion