Consider Two Individuals - Howard and Mai - Each of Whom

question 40

Multiple Choice

Consider two individuals - Howard and Mai - each of whom would like to wear sweaters and eat tasty food.The gains from trade between Howard and Mai are least obvious in which of the following cases?

• A)Howard is very good at knitting sweaters and at cooking tasty food,but Mai's skills in both of these activities are very poor.
• B)Howard is very good at knitting sweaters and at cooking tasty food;Mai is very good at knitting sweaters,but she knows nothing about cooking tasty food.
• C)Howard's skills in knitting sweaters are fairly good,but his skills in cooking tasty food are fairly bad;Mai's skills in knitting sweaters are fairly bad,but her skills in cooking tasty food are fairly good.
• D)Howard's skills are such that he can produce only sweaters,and Mai's skills are such that she can produce only tasty food.

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Definitions:

Premium

The amount paid for a product or service above its nominal or face value.

Horizontal Acquisitions

A form of corporate acquisition where a company buys another company that operates in the same industry at the same level of the supply chain.

Synergistic Increases

Enhancements in value or performance achieved through the combination or cooperation of different entities, surpassing what would be possible individually.

Value

The importance, worth, or usefulness of something, often in economic terms.