Each of 100 people receives a random item from a grocery store and assigns it a value between 1 (low) and 10 (high). They trade those items among themselves for items they prefer rather than those they randomly received and then assign a second value (again, 1 to 10) to the item that they end up with after the trading concludes. How would the sum of those values before trading compare with the sum after trading?
A) The value would stay the same because no new goods were introduced.
B) The value would stay the same because no one has a comparative advantage.
C) After trading, value would be lower because no one can specialize.
D) After trading, value would be higher because preferences are diverse.

Question

Quizplus · Accepted Answer

After trading, the value would be higher because people have different preferences and can trade items in order to obtain what they place a higher value on. This leads to higher satisfaction for each person, resulting in an overall increase in the value of the items.

Each of 100 People Receives a Random Item from a Grocery