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Pat Cusack's avatar

Alice seems to be giving Bob 800b of wheat for nothing. That should be 1,000b and worth £1,000 to Alice.

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Economics21st's avatar

Why do you say it's for nothing? Bob sold her some wheat seeds which were carefully selected to be especially suitable for sowing (consistent size and quality). What he gets back is a mixture of grains, some suitable for sowing and some only for milling. And like any merchant, Bob makes a profit on his service by buying at a lower price than he sells for.

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