Which of the Following Is an Example of Barter

question 2

Multiple Choice

Which of the following is an example of barter?

• A)A parent gives a teenager a $10 bill in exchange for her babysitting services.
• B)A homeowner gives an exterminator a check for $50 in exchange for extermination services.
• C)A barber gives a plumber a haircut in exchange for the plumber fixing the barber's leaky faucet.
• D)All of the above are examples of barter.

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one good for another.

Relative Prices

The price of one good or service compared to another, often used to indicate the value or cost-effectiveness between different items.

Substitution Effect

Substitution Effect occurs when consumers replace more expensive items with cheaper alternatives in response to changes in relative prices, holding their overall satisfaction constant.

Relative Prices

Relative prices express the price of one good or service in comparison to another, revealing their value relative to each other rather than in absolute monetary terms.