Question 3 Belgium and France are both members of the European Union. Their membership in the union prevents them from imposing tariffs on each other''s goods and services. This question will explore how the penalties for breaking EU trade rules might alter countries' behavior. Belgium and France can independently choose to impose a tariff on imports from the other country. The normal form game below depicts the payoffs associated with each possible outcome of this interaction. Importantly, the values below do not take account of any possible penalties for breaking EU trade rules. Impose Don't Impose Tariff Tariff g8 3 E' = F: 18 billion F: 14 billion = 2 = o o Part (i): Identify the Nash Equilibrium of the game. Part (ii): Suppose that the European Union imposes a fine on any country that imposes a tariff. Not surprisingly, sufficiently small fines will not affect the counties' decisions. What is the maximum fine such that the Mash Equilibrium you identified in Part (j) is still the Nash Equilibrium of this game? Part (iii): Suppose that the European Union imposes a fine on any country that imposes a tariff. There is a range of values for this fine such that Belgium does not impose a tariff, but France does. What is this range? Part (iv): Suppose that the European Union imposes a fine on any country that imposes a tariff. There is a minimum fine above which neither country imposes a tariff. What is this threshold value