A baker can produce only bread, while a butcher can produce only sliced deli meats. If the baker and the butcher like both foods, which of the following is most likely?
A) They cannot gain from trade.
B) They could gain from trade under certain circumstances, but not always.
C) They could gain from trade because each would enjoy a greater variety of food.
D) They could gain from trade only if each were indifferent between bread and sliced deli meats.

Question

Quizplus · Accepted Answer

Both the baker and the butcher can benefit from trade as each would enjoy a greater variety of food. The baker could give the butcher bread in exchange for sliced deli meats, and vice versa.

A Baker Can Produce Only Bread, While a Butcher Can