Multiple Choice
Suppose,given their initial endowments of milk [M] and cookies [C],we 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 we know that a mutually beneficial trade would involve Ashley selling ______ to Carol and Bill selling ______ to Ashley.
A) milk;cookies
B) milk;milk
C) cookies;milk
D) cookies;cookies
Correct Answer:
Verified
Correct Answer:
Verified
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