The Case in Point on P

question 222

Multiple Choice

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.

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Definitions:

Conditional Probability

The probability of an event occurring given the occurrence of another event, often represented as P(A|B).

Independent Events

Two or more events where the occurrence of one does not affect the probability of the other(s).

Event Will Not Occur

The probability that a specific event does not happen, which can be calculated by subtracting the event’s probability of occurring from 1.

Conditional Probability

The likelihood of one event happening after another event has already taken place.