Jenn will not accept terms of trade that are worse than her no-trade PPF     Let's consider Jeff and Jenn again. Remember that without trade Jenn's opportunity for an image is 2 pages. Certainly, she would never accept terms of trade worse than this.

    Suppose Jeff convinces Jenn to accept 1 page for 2 images and to trade a total of 10 images to him in exchange for 5 pages. This would give Jeff 55 pages and 10 images, a bundle above the STOR, leaving Jenn with 5 pages and 40 images, a bundle on her no-trade PPF.

    Jenn doesn't have to agree to such a bad deal, and there is reason to believe she wouldn't, but we can be certain these are the worst terms of trade she would ever accept.

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