Which one of the following could be the buildings owned by the three companies after only one trade is made?

Vennela-Vellanki on August 23, 2020

How to solve this question?

Can someone explain how to work through this question? I'm struggling to visualize even with the game set up help

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Emil-Kunkin on February 4 at 04:34PM

We could probably call this a group game, but what really matters are the initial endowments and the exchange rates. We know that each building can be traded, and that cat 1 = 2 cat 2, and cat 2 equals 2 cat 3. We know that each company must only make trades according to this formula, so we need for figure out the initial endowments. We can assign values to each building type: cat 1 is worth four cat threes, cat two is worth two cat threes, and cat three is worth one. Thus

R = 6
S= 6
T= 6

Any scenario that preserves this distribution using valid trades is valid.

For this question we are looking for evidence of an invalid trade: we can find this by showing the value of one of them is not six.

Eg for A, R equals 8, so we know a is incorrect.