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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