Figure 3-3

-Refer to Figure 3-3.At which of the following prices would both Arturo and Dina 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) Arturo and Dina could not both gain from trade with each other at any price.

Question

Figure 3-3
 
-Refer to Figure 3-3.At which of the following prices would both Arturo and Dina 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) Arturo and Dina could not both gain from trade with each other at any price.

Quizplus · Accepted Answer

At a price of 12 burritos for 21 tacos, both Arturo and Dina would gain from trade. Arturo can produce burritos at a lower opportunity cost than Dina, and Dina can produce tacos at a lower opportunity cost than Arturo. Therefore, both parties can benefit from specializing in the production of the good in which they have a comparative advantage and trading with each other.

Figure 3-3 -Refer to Figure 3-3.At Which of the Following Prices Would