Table 3-9 Summary of the Gains from Trade

-Refer to Table 3-9. The values in the table represent the amounts of lemonade and pizzas that Alice and Betty can produce in one week without and with specialization and trade. What are Alice and Betty's gains from specialization and trade?
A)Alice gains 9 pitchers of lemonade and 12 pizzas, while Betty gains 12 pitchers of lemonade and 7 pizzas.
B)Alice gains 200 pitchers of lemonade and 100 pizzas, while Betty gains 180 pitchers of lemonade and 180 pizzas.
C)Alice gains 12 pitchers of lemonade and 7 pizzas, while Betty gains 9 pitchers of lemonade and 9 pizzas.
D)Alice gains 112 pitchers of lemonade and 0 pizzas, while Betty gains 0 pitchers of lemonade and 300 pizzas.

Question

Table 3-9 Summary of the Gains from Trade
​
​
  ​
-Refer to Table 3-9. The values in the table represent the amounts of lemonade and pizzas that Alice and Betty can produce in one week without and with specialization and trade. What are Alice and Betty's gains from specialization and trade?
A)Alice gains 9 pitchers of lemonade and 12 pizzas, while Betty gains 12 pitchers of lemonade and 7 pizzas. 
B)Alice gains 200 pitchers of lemonade and 100 pizzas, while Betty gains 180 pitchers of lemonade and 180 pizzas. 
C)Alice gains 12 pitchers of lemonade and 7 pizzas, while Betty gains 9 pitchers of lemonade and 9 pizzas. 
D)Alice gains 112 pitchers of lemonade and 0 pizzas, while Betty gains 0 pitchers of lemonade and 300 pizzas.

Quizplus · Accepted Answer

Alice can produce 100 pitchers of lemonade and 100 pizzas without specialization. With specialization, she can produce 200 pitchers of lemonade and 0 pizzas. So, she gains 100 pitchers of lemonade (200 - 100) and loses 100 pizzas (0 - 100).Betty can produce 100 pitchers of lemonade and 200 pizzas without specialization. With specialization, she can produce 0 pitchers of lemonade and 300 pizzas. So, she loses 100 pitchers of lemonade (0 - 100) and gains 100 pizzas (300 - 200).Therefore, Alice gains 100 pitchers of lemonade and loses 100 pizzas, while Betty loses 100 pitchers of lemonade and gains 100 pizzas.