The Case in Point on P.O.W.camps stated that in situations where trade among the prisoners was allowed, in equilibrium the marginal rate of substitution between coffee and tea:
A) was equal to the same price ratio for both French and British prisoners.
B) for French prisoners was lower than for British prisoners.
C) for French prisoners was higher than for British prisoners.
D) for British prisoners was 1, while the French prisoners preferred not to engage in exchange.

Question

Quizplus · Accepted Answer

The Case in Point mentioned that in P.O.W. camps where trade was allowed, the marginal rate of substitution between coffee and tea was equal to the same price ratio for both French and British prisoners. Therefore, choice A is the correct answer.