In Table 6.1,if initially Jane has basket D and Bill has basket A,then we can conclude that a mutually beneficial trade _____.
A)does not exist
B)requires that Jane sell Pizza and Bill sell Coke
C)requires that Jane sell either Coke or Pizza
D)requires that Jane sell Coke and Bill sell Pizza

Question

Quizplus · Accepted Answer

According to Table 6.1, Basket D contains Coke and Pizza, and Basket A contains only Coke. To have a mutually beneficial trade, Jane can sell Coke to Bill, and Bill can sell Pizza to Jane. Therefore, Jane should sell Coke and Bill should sell Pizza, which is only possible in choice D.