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In World War II, a German POW camp guard exchanged bread and chocolate with prisoners at the rate of one loaf for one chocolate bar.

In World War II, a German POW camp guard exchanged bread and chocolate with prisoners at the rate of one loaf for one chocolate bar. Inside the POW camp, the price was 15 cigarettes per chocolate bar, and 40 cigarettes per loaf of bread. Is there an opportunity for beneficial exchange?

With the guard, a POW could exchange three chocolate bars for _____ loaves of bread. In the camp, the POW could exchange the loaves for _____ cigarettes, and then exchange the cigarettes for _____ chocolate bars. In other words, the POWs net gain from trade is _____ ?

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