Multiple Choice
Suppose,given their initial endowments of milk [M] and cookies [C],you know that Ashley's marginal rate of substitution of cookies for milk [MRSCM] = 3M/1C,Bill's MRSCM = 8M/8C,and Carol's MRSCM = 5M/10C.Given this information,a mutually beneficial trade:
A) cannot not exist between the three individuals.
B) would involve Ashley and Bill selling cookies to Carol.
C) would involve Ashley and Bill selling milk to Carol.
D) would involve Carol selling milk to Ashley and cookies to Bill.
Correct Answer:
Verified
Correct Answer:
Verified
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