Gains from Trade Can Only Occur When

question 10

Multiple Choice

Gains from trade can only occur when

• A) marginal rates of substitutions differ across people.
• B) marginal rates of substitution are equal across people.
• C) indifference curves are convex.
• D) people find themselves on the contract curve.

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Definitions:

Control

The power to influence or direct people's behavior or the course of events.

Linear

Pertaining to or resembling a line; involving a sequence of events that follows a straightforward, direct path with a clear beginning and end.

Cause and Effect

The relationship between events or phenomena where one is the result of the other or others, a fundamental principle of logic and reasoning.

Negotiating Collective

A group or body that comes together to bargain collectively, often for better wages, working conditions, or other shared goals.