The figure given below represents the PPC in two nations

Question

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
 
-Barter requires a double coincidence of wants. This means that:
A)at least two traders must demand a commodity. 
B)any two traders involved in a transaction must have money. 
C)each trader must demand at least two commodities. 
D)either of the two traders involved in a transaction must have money. 
E)when two traders are involved in a transaction each trader must want what the other has to offer.

Quizplus · Accepted Answer

Barter requires a double coincidence of wants, which means that when two traders are involved in a transaction each trader must want what the other has to offer. Option E correctly identifies this condition. Option A is incorrect as it states at least two traders must demand a commodity, which is not necessarily true for a barter transaction. Options B, C and D are unrelated to the concept of double coincidence of wants and are therefore incorrect.