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Tova and Ron Are the Only Two People on the Planet

Question 131

Multiple Choice

Tova and Ron are the only two people on the planet Melmac. It takes Tova 1 hour to produce a widget and 2 hours to produce a woggle.
It takes Ron 3 hours to produce a widget and 3 hours to produce a woggle.
Based on the information above, Tova and Ron


A) can both gain from trade if Tova specializes in producing widgets and Ron specializes in producing woggles.
B) can both gain from trade if Tova specializes in producing woggles and Ron specializes in producing widgets.
C) cannot both gain from trade because Tova has an absolute advantage in producing widgets and woggles.
D) can trade, but only Tova will gain.
E) can trade, but only Ron will gain.

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