Figure 3-3
Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier
-Refer to Figure 3-3.At which of the following prices would both Bob and Enid gain from trade with each other?
A) 12 burritos for 21 tacos
B) 12 burritos for 27 tacos
C) 12 burritos for 36 tacos
D) Bob and Enid could not both gain from trade with each other at any price.

Question

Figure 3-3
Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier  
-Refer to Figure 3-3.At which of the following prices would both Bob and Enid gain from trade with each other?
A) 12 burritos for 21 tacos 
B) 12 burritos for 27 tacos 
C) 12 burritos for 36 tacos 
D) Bob and Enid could not both gain from trade with each other at any price.

Quizplus · Accepted Answer

At a price of 12 burritos for 21 tacos, Bob can trade 12 burritos for 21 tacos, which is better than his original endowment of 15 burritos for 15 tacos. Enid can trade 21 tacos for 12 burritos, which is better than her original endowment of 15 tacos for 15 burritos.

Figure 3-3 Bob's Production Possibilities Frontier Enid's Production Possibilities Frontier