If Sam and Sally are off their contract curve for dining hall tickets and economics texts and they meet to move to the contract curve, describe the conversation that would likely take place.

What will be an ideal response?


Sam tells Sally that he has finished the economics course that she is planning on taking next term and because he studied so hard he missed some meals and is hungry. Sally says that she hasn't missed a meal yet and so she wonders whether he would be willing to trade meal tickets for the text. They finally agree that Sally will give 3 meal tickets for the text.
Of course, numerous stories could be told, but they all should show that the MRS between goods for each person differ at the beginning making trade advantageous for both.

Economics

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