Figure 3-14
Arturo's Production Possibilities Frontier
Dina's Production Possibilities Frontier
-Refer to Figure 3-14.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 3-14
Arturo's Production Possibilities Frontier
Dina's Production Possibilities Frontier  
-Refer to Figure 3-14.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, Arturo can trade 12 burritos for 21 tacos, which is more than the 15 tacos he can produce himself. Dina can trade 21 tacos for 12 burritos, which is more than the 9 burritos she can produce herself. Therefore, both Arturo and Dina would gain from trade at this price.

Figure 3-14 Arturo's Production Possibilities Frontier