Lena and Jess are roommates.Lena hates to clean the bathroom.Jess will agree to clean the bathroom only if Lena vacuums the living room.Which economic concept does this statement BEST represent?
A)When markets don't achieve efficiency,government intervention can improve society's welfare.
B)"How much" is a decision at the margin.
C)One person's spending is another person's income.
D)There are gains from trade.

Question

Quizplus · Accepted Answer

This statement represents gains from trade as Lena and Jess are exchanging their cleaning services, each providing a service that the other person values more than their own. This increases both their welfare and productivity as they are able to specialize in tasks they are comparatively better at.

Lena and Jess Are Roommates