Question 3 

It is common for provincial governments to justify subsidies to the tourist sector (or any other sector, for that matter) based on the argument that jobs will be created, and the associated additional benefits (tax revenue, etc.) 

a) Does the validity of this argument change if the increased employment in the province is partially due to the arrival of out of province workers? b) For PEI specifically, is this argument more valid during the peak tourism season, or in the offseason? 

Question 4 

Consider the problem of PEI and NB, who are competing for the tourists arriving from Ontario and the Northeast U.S. If both choose to subsidize tourism by $15,000,000 (each); they will receive additional tourism revenue of $17,000,000 (each). If one province subsidizes tourism, but the other does not; the province with the subsidy will receive additional tourism revenue of $10,000,000 while the other will receive additional revenue of $3,000,000. 

a) If each province has the choice of subsidize or not, set up the payoff matrix for the game. 

b) Does either province have a dominant strategy? 

c) Is the outcome of this game optimal for the provinces?

 

Please help me with the correct and detailed solutions for these questions.

Answer rating: 100% (QA)

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