Consider a dentist and a 14-year old boy. The dentist can make $100 per hour drilling teeth and the 14-year old boy can make $2 per hour picking up used aluminum cans. The dentist is a manly man and can mow his half-acre lot in one hour. The 14-year old boy can mow the lawn in two hours. If the dentist hires the boy to mow his lawn at any price less than $100, but more than $4

Question

Quizplus · Accepted Answer

The dentist can make more money drilling teeth than mowing his lawn, so it makes sense for him to hire the boy to mow the lawn at a price less than $100 but more than $4. This way, he gets his lawn mowed for a cheaper price than his own hourly rate, and the boy gets paid more than his usual rate for picking up cans. Both parties benefit from the transaction, so it is a mutually beneficial exchange rather than exploitation.

Consider a Dentist and a 14-Year Old Boy