When Fred's computer sends the ARP broadcast, Betty's machine will be doing the same thing, since she wants the recipe for Bronto burgers. Here again her layer 2 broadcast is "I know Wilma's IP address but I do not know her MAC address", thus her layer two broadcast will be processed by every machine in the network.
Keep in mind that this is Ethernet (CSMA/CD - Collsions Sense, Multiple Access and Collision Detection). Before a frame is sent it senses if there has been a collision and if not it will send it's frame. Multiple access in this case is the Flintstones and the Rubbles. Collision Detection is built into Ethernet, thus when a collision takes place there will be a back off period, and all machines are told to back-off until the mess gets cleaned up.
In our case the two frames meet in the middle and have a collision.
To split collsion Domains we use either a bridge or a switch, and in our case we are using a switch which is a layer 2 device. The nice thing about using the switch as seen here is that we now have four collision domains based at layer two, but we still have one large layer three Broadcast Domain.
BTW - Pebbles and BAM BAM moved out and got married!
