A butcher can produce only sausages, and a farmer can produce only potato chips. The butcher and the farmer like both foods. They:
A) cannot gain from trade under any circumstances
B) could gain from trade under certain circumstances, but not always
C) could gain from trade because each would enjoy a greater variety of food
D) could gain from trade only if they were indifferent between sausages and potato chips

Question

Quizplus · Accepted Answer

By trading, the butcher and farmer could both enjoy a greater variety of food. The butcher could trade some of his sausages for some of the farmer's potato chips, allowing both of them to have a meal with sausages and potato chips. Therefore, they could gain from trade because they would have access to a greater variety of food.

A Butcher Can Produce Only Sausages, and a Farmer Can